Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Current Ratio since 2005
- Analysis of Debt
- Aggregate Accruals
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Current Valuation Ratios
Netflix Inc., current price multiples
| Netflix Inc. | Alphabet Inc. | Comcast Corp. | Meta Platforms Inc. | Trade Desk Inc. | Walt Disney Co. | Media & Entertainment | Communication Services | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||
| Current share price (P) | |||||||||||
| No. shares of common stock outstanding | |||||||||||
| Growth rate (g) | |||||||||||
| Earnings per share (EPS) | |||||||||||
| Next year expected EPS | |||||||||||
| Operating profit per share | |||||||||||
| Sales per share | |||||||||||
| Book value per share (BVPS) | |||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||
| Price to earnings (P/E) | |||||||||||
| Price to next year expected earnings | |||||||||||
| Price-earnings-growth (PEG) | |||||||||||
| Price to operating profit (P/OP) | |||||||||||
| Price to sales (P/S) | |||||||||||
| Price to book value (P/BV) | |||||||||||
Based on: 10-K (reporting date: 2025-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Netflix Inc., historical price multiples
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The valuation ratios exhibit varied trends over the five-year period. Generally, ratios increased from 2022 to 2024, followed by a decline in 2025. This suggests a period of increasing investor optimism followed by a potential correction or shift in market sentiment.
- Price to Earnings (P/E)
- The Price to Earnings ratio increased from 33.56 in 2021 to a peak of 47.72 in 2024, indicating investors were willing to pay a higher premium for each dollar of earnings. However, the ratio decreased to 33.11 in 2025, approaching the level observed in 2021. This suggests a moderation in earnings expectations or a decrease in investor confidence.
- Price to Operating Profit (P/OP)
- Similar to the P/E ratio, the Price to Operating Profit ratio demonstrated an upward trend from 27.71 in 2021 to 39.91 in 2024. The 2025 value of 27.28 represents a decline, mirroring the trend observed in the P/E ratio and potentially indicating a reassessment of the company’s operational profitability by investors.
- Price to Sales (P/S)
- The Price to Sales ratio showed the most substantial increase during the period, rising from 5.78 in 2021 to 10.66 in 2024. This indicates a significant increase in the price investors were willing to pay for each dollar of revenue. The subsequent decrease to 8.05 in 2025 suggests a potential cooling of revenue-based valuation. The increase is more pronounced than the earnings-based ratios, potentially indicating revenue growth was a key driver of valuation during 2022-2024.
- Price to Book Value (P/BV)
- The Price to Book Value ratio fluctuated over the period. It decreased from 10.83 in 2021 to 7.82 in 2022, then increased to 16.80 in 2024 before falling to 13.66 in 2025. This suggests a changing perception of the company’s net asset value relative to its market price. The increase in 2024 may indicate increased confidence in the company’s ability to generate returns on its assets, while the 2025 decline suggests a reversal of this sentiment.
Overall, the observed patterns suggest a period of increasing valuation multiples through 2024, followed by a moderation in 2025. The Price to Sales ratio experienced the most significant change, while the Price to Book Value ratio exhibited the most volatility. These shifts warrant further investigation into the underlying factors driving these trends.
Price to Earnings (P/E)
Netflix Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in thousands) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| P/E Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/E Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Netflix Inc. Annual Report.
4 2025 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The price to earnings (P/E) ratio exhibited fluctuating behavior over the five-year period. Initially, the ratio demonstrated an increase followed by a subsequent decline. A review of the underlying components, share price and earnings per share, provides further context to these movements.
- Share Price
- The share price decreased from US$38.67 in 2021 to US$36.49 in 2022, representing a slight contraction. A significant increase was then observed, with the share price reaching US$57.04 in 2023 and peaking at US$97.19 in 2024. The share price experienced a decrease in 2025, settling at US$86.12.
- Earnings Per Share (EPS)
- Earnings per share decreased from US$1.15 in 2021 to US$1.01 in 2022. Subsequent years showed consistent growth, with EPS increasing to US$1.25 in 2023, US$2.04 in 2024, and further to US$2.60 in 2025. This indicates a positive trend in profitability.
- P/E Ratio Trend
- The P/E ratio increased from 33.56 in 2021 to 36.18 in 2022, coinciding with the decrease in share price being less pronounced than the decrease in EPS. A substantial increase was then noted, rising to 45.64 in 2023 and 47.72 in 2024. This increase was driven by a larger increase in share price relative to EPS. In 2025, the P/E ratio decreased to 33.11, attributable to the share price decline and continued EPS growth.
- P/E Ratio Interpretation
- The P/E ratio remained relatively high throughout the period, suggesting that investors were willing to pay a premium for each dollar of earnings. The peak in 2024 indicates heightened investor optimism or expectations for future growth. The decrease in 2025, while still representing a substantial multiple, may reflect a recalibration of expectations or a response to market conditions.
In summary, the P/E ratio’s movements were influenced by the interplay between share price and earnings per share. While both metrics generally trended upwards, the relative magnitude of their changes dictated the fluctuations observed in the P/E ratio.
Price to Operating Profit (P/OP)
Netflix Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in thousands) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| P/OP Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/OP Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Netflix Inc. Annual Report.
4 2025 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
The Price to Operating Profit (P/OP) ratio exhibited a fluctuating pattern over the five-year period. Initially, the ratio demonstrated an increase followed by a decrease, suggesting shifts in investor sentiment regarding the company’s operational profitability relative to its market price.
- Overall Trend
- The P/OP ratio increased from 27.71 in 2021 to 39.91 in 2024, indicating investors were willing to pay a progressively higher premium for each dollar of operating profit. However, this trend reversed in 2025, with the ratio declining to 27.28. This recent decrease suggests a potential recalibration of market expectations or a change in the perceived growth prospects of the company’s operating profitability.
- Year-over-Year Changes
- From 2021 to 2022, the P/OP ratio experienced a modest increase, rising from 27.71 to 28.85. A more substantial increase occurred between 2022 and 2023, with the ratio climbing to 35.50. The largest year-over-year change was observed from 2023 to 2024, where the P/OP ratio increased significantly to 39.91. The most recent period, from 2024 to 2025, saw a notable decrease in the ratio, falling to 27.28.
- Relationship to Operating Profit per Share
- The increase in the P/OP ratio from 2021 to 2024 coincided with an increase in operating profit per share, from US$1.40 to US$2.44. This suggests that rising profitability initially supported a higher valuation multiple. However, despite further growth in operating profit per share to US$3.16 in 2025, the P/OP ratio decreased, indicating that the market’s valuation of each dollar of operating profit diminished during that period.
The observed fluctuations in the P/OP ratio warrant further investigation to determine the underlying drivers. Factors such as changes in growth expectations, competitive landscape, and overall market conditions could contribute to these shifts in valuation.
Price to Sales (P/S)
Netflix Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Revenues (in thousands) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| P/S Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/S Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Netflix Inc. Annual Report.
4 2025 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The price-to-sales ratio exhibited a fluctuating pattern over the five-year period. Initially, the ratio decreased before increasing substantially, then declining again. Share price and sales per share both demonstrated an overall upward trajectory, though not consistently year-over-year.
- Price-to-Sales Ratio
- The price-to-sales ratio began at 5.78 in 2021, then decreased to 5.14 in 2022. A significant increase was observed in 2023, with the ratio reaching 7.32. This upward trend continued into 2024, with the ratio peaking at 10.66. However, the ratio decreased in 2025, settling at 8.05. This suggests a period of increasing investor valuation relative to sales, followed by a moderation in the most recent year.
- Share Price
- The share price experienced a slight decrease from US$38.67 in 2021 to US$36.49 in 2022. A substantial increase occurred in 2023, reaching US$57.04. Further growth was seen in 2024, with the share price rising to US$97.19. A decline was then noted in 2025, with the share price ending the period at US$86.12. The overall trend indicates positive price momentum, despite the final year’s decrease.
- Sales per Share
- Sales per share consistently increased throughout the period. From US$6.69 in 2021, it rose to US$7.10 in 2022, US$7.79 in 2023, US$9.12 in 2024, and finally to US$10.70 in 2025. This consistent growth suggests a steady increase in the company’s revenue generation per share outstanding.
The observed increase in the price-to-sales ratio between 2022 and 2024, coupled with the increasing share price, suggests that investors were willing to pay a higher premium for each dollar of sales during that period. The subsequent decrease in the price-to-sales ratio in 2025, despite continued growth in sales per share, may indicate a shift in investor sentiment or a reassessment of the company’s growth prospects.
Price to Book Value (P/BV)
Netflix Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in thousands) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| P/BV Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/BV Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Netflix Inc. Annual Report.
4 2025 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
The price to book value ratio exhibited fluctuations over the five-year period. Initially, the ratio decreased before increasing again, suggesting shifts in market valuation relative to the company’s net asset value.
- Price to Book Value (P/BV) Trend
- The P/BV ratio began at 10.83 in 2021. A decrease was observed in 2022, with the ratio falling to 7.82. Subsequently, the ratio increased to 11.99 in 2023. A significant rise occurred in 2024, reaching 16.80, before declining to 13.66 in 2025.
The share price demonstrated a similar pattern of decline followed by growth. The book value per share, however, showed a consistent upward trend throughout the period.
- Share Price Analysis
- The share price decreased from US$38.67 in 2021 to US$36.49 in 2022. A substantial increase was then recorded, with the price reaching US$57.04 in 2023 and further increasing to US$97.19 in 2024. The share price experienced a decrease in 2025, settling at US$86.12.
- Book Value Per Share (BVPS) Analysis
- Book value per share increased steadily over the period. From US$3.57 in 2021, it rose to US$4.67 in 2022, US$4.76 in 2023, US$5.78 in 2024, and finally to US$6.30 in 2025. This consistent growth indicates an increasing net asset value per share.
The divergence between the share price and book value trends contributed to the observed fluctuations in the P/BV ratio. The substantial increase in the P/BV ratio in 2024 suggests a significant premium placed on the company’s net assets by the market during that year, while the subsequent decrease in 2025 indicates a moderation of this premium.