Financial Comparison of Netflix and Disney
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy NFLX?
Source: Fool
- Netflix Revenue Growth: Netflix reported a net income margin of approximately 20% for Q4 2025, achieving $9.4 billion in revenue for Q1 2024, indicating a stable subscription model and ongoing user growth, which is expected to continue driving future revenue increases.
- Disney's Diversified Revenue: Disney's revenue reached $24.7 billion in Q4 2025 with a net income margin of about 9%, deriving income from multiple business lines including media advertising, subscriptions, toys, and theme parks, providing stability despite revenue fluctuations.
- Market Performance Discrepancy: Netflix's gross margin stands at 48.59%, significantly higher than Disney's 31.61%, reflecting Netflix's superior profitability, making it a more attractive investment option for investors.
- Future Growth Potential: Netflix is expected to continue driving revenue growth through new content releases, while Disney faces challenges; however, its streaming segment's operating margin is projected to double to 10%, indicating potential for improvement despite overall revenue growth limitations.
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Analyst Views on NFLX
Wall Street analysts forecast NFLX stock price to rise
38 Analyst Rating
27 Buy
10 Hold
1 Sell
Moderate Buy
Current: 102.050
Low
92.00
Averages
114.18
High
150.00
Current: 102.050
Low
92.00
Averages
114.18
High
150.00
About NFLX
Netflix, Inc. is a provider of entertainment services. The Company acquires, licenses and produces content, including original programming. It provides paid memberships in over 190 countries offering television (TV) series, films and games across a variety of genres and languages. It allows members to play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time. The Company offers members the ability to receive streaming content through a host of Internet-connected devices, including TVs, digital video players, TV set-top boxes and mobile devices. It is engaged in scaling its streaming service, such as introducing games and advertising on its service, as well as offering live programming. It is developing technology and utilizing third-party cloud computing, technology and other services. The Company is also engaged in scaling its own studio operations to produce original content.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Netflix Reports Record 2025 Earnings Ahead of Q1 2026 Results
- Strong User Growth: By the end of 2025, Netflix surpassed 325 million paying subscribers, significantly outpacing rivals HBO Max and Disney+, which each have around 131 million, solidifying its dominance in the streaming market and expected to continue attracting new users and increasing market share.
- Surge in Ad Revenue: In 2025, Netflix's advertising revenue reached $1.5 billion, growing over 150%, with expectations to double again in 2026; while the ad-supported subscription model generates lower initial revenue, the long-term value increases as the subscriber base expands.
- Impressive Financial Performance: Netflix anticipates first-quarter 2026 revenue of $12.2 billion, reflecting a 15.3% year-over-year growth, marking an acceleration in revenue growth, with projected earnings of $0.76 per share, the highest in company history, boosting investor confidence.
- Attractive Stock Valuation: With a current P/E ratio of 40.3, below the five-year average of 42.5, and projected earnings growth to $3.17 per share in 2026, Netflix's stock would need to rise 52% to maintain its current valuation, indicating strong potential returns for investors.
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Market Pullback Risk Grows, Investment Strategy Adjustments
- Market Pullback Risk: Stocks edged lower on Friday, putting the S&P 500's seven-day winning streak at risk, as profit-taking emerged after a strong week where the index rose approximately 3.5%, indicating cautious market sentiment.
- Target Price Adjustments: We raised Dover's price target from $220 to $230, anticipating growth across all its business segments in 2026, while noting its limited exposure to the Middle East, which underscores its robust growth potential.
- Strong Demand Outlook: Lumentum's CEO indicated the company is nearly sold out of optical components through 2028, suggesting strong demand, leading to an increase in Corning's price target from $160 to $180, reflecting its pricing power in the optical fiber market for data centers.
- Software Stock Pressure: We lowered the price targets for Salesforce and Microsoft to $215 and $500, respectively, due to ongoing pressure from AI threats in the enterprise software market, which is expected to impact their price-to-earnings multiples, reflecting a cautious outlook on software stocks.
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Investors Anticipate Q1 Earnings to Propel Market Recovery
- Market Recovery Signal: Following President Trump's suspension of attacks on Iran, the Dow Jones Industrial Average surged over 1,300 points this week, marking its best single-day performance since April 2025, indicating investor confidence in market recovery.
- Earnings Season Outlook: The S&P 500 companies are expected to report a blended earnings growth rate of 12.5% for Q1, marking the sixth consecutive quarter of double-digit growth, with the information technology sector projected to jump 44%, underscoring its significance to the market.
- Risk Warning: Despite the optimistic overall earnings outlook, Delta Air Lines announced it would
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Disney Could Outperform Netflix in Streaming
- Netflix's Impressive Growth: As of 2025, Netflix boasts 325 million paying subscribers, with annual revenue hitting $45.2 billion and operating income at $13.3 billion, underscoring its dominant position and robust growth potential in the streaming industry.
- Disney's Investment Appeal: With a forward P/E ratio of 14.5 compared to Netflix's 31.4, Disney's shares are trading at a 54% discount, suggesting a potential 40% upside if it reaches the S&P 500's forward P/E of 20.3, making it a more attractive investment option.
- Earnings Growth Catalyst: Disney's direct-to-consumer segment, including Disney+ and Hulu, reported a 72% year-over-year increase in operating income to $450 million in Q1 of fiscal 2026, with a projected operating margin of 10% for the full year, indicating strong profitability.
- Competitive Edge: Disney's extensive intellectual property allows for continuous fresh content production, and with a combined 191 million subscribers on Disney+ and Hulu by the end of fiscal 2025, it demonstrates significant competitive strength in the streaming market, potentially outperforming Netflix by April 2031.
See More
Competitive Analysis of Netflix and Disney
- Significant User Growth: Netflix's subscriber base surged from 71 million to 325 million over the past 15 years, demonstrating its strong appeal in the streaming market and further solidifying its industry leadership.
- Revenue and Profit Surge: In 2025, Netflix reported $45.2 billion in revenue and $13.3 billion in operating income, reflecting a 6.5-fold and 43.5% increase respectively since 2015, showcasing the success of its business model and robust market demand.
- Valuation Comparison: While Netflix's forward P/E ratio stands at 31.4, indicating a high valuation, Disney's lower ratio of 14.5 presents a 54% discount, attracting investor interest in its potential investment opportunities.
- Content Advantage: Disney's strong intellectual property portfolio enables it to continuously produce fresh content, with a combined subscriber count of 191 million for Disney+ and Hulu in 2025, showcasing its competitive capability against Netflix in the streaming industry.
See More
Wall Street's Latest Rating Changes Analysis
- MSG Sports Upgrade: Seaport upgraded Madison Square Garden Sports from neutral to buy, citing a significant 57.5% trading discount versus intrinsic value, suggesting a potential appreciation ahead of the 2025-26 season, particularly with plans to spin off the Knicks and Rangers into standalone entities.
- ServiceNow Downgrade: UBS downgraded ServiceNow from buy to neutral due to weakened confidence in the software sector, projecting a decline in 2026 free cash flow to 15x, reflecting increased budget pressures on non-AI applications that could impact future performance.
- Shake Shack Sales Growth: Mizuho upgraded Shake Shack from neutral to outperform, anticipating upside in same-store sales for Q1, driven by strong demand and improved restaurant-level margins, indicating robust market momentum and growth potential.
- Nvidia Strong Performance: Raymond James reiterated a strong buy rating on Nvidia, based on favorable trends in its Asia supply chain, with suppliers receiving increased forecasts during the quarter, reinforcing Nvidia's position as a market leader.
See More
Netflix Reports Record 2025 Earnings Ahead of Q1 2026 Results
- Strong User Growth: By the end of 2025, Netflix surpassed 325 million paying subscribers, significantly outpacing rivals HBO Max and Disney+, which each have around 131 million, solidifying its dominance in the streaming market and expected to continue attracting new users and increasing market share.
- Surge in Ad Revenue: In 2025, Netflix's advertising revenue reached $1.5 billion, growing over 150%, with expectations to double again in 2026; while the ad-supported subscription model generates lower initial revenue, the long-term value increases as the subscriber base expands.
- Impressive Financial Performance: Netflix anticipates first-quarter 2026 revenue of $12.2 billion, reflecting a 15.3% year-over-year growth, marking an acceleration in revenue growth, with projected earnings of $0.76 per share, the highest in company history, boosting investor confidence.
- Attractive Stock Valuation: With a current P/E ratio of 40.3, below the five-year average of 42.5, and projected earnings growth to $3.17 per share in 2026, Netflix's stock would need to rise 52% to maintain its current valuation, indicating strong potential returns for investors.
See More
Market Pullback Risk Grows, Investment Strategy Adjustments
- Market Pullback Risk: Stocks edged lower on Friday, putting the S&P 500's seven-day winning streak at risk, as profit-taking emerged after a strong week where the index rose approximately 3.5%, indicating cautious market sentiment.
- Target Price Adjustments: We raised Dover's price target from $220 to $230, anticipating growth across all its business segments in 2026, while noting its limited exposure to the Middle East, which underscores its robust growth potential.
- Strong Demand Outlook: Lumentum's CEO indicated the company is nearly sold out of optical components through 2028, suggesting strong demand, leading to an increase in Corning's price target from $160 to $180, reflecting its pricing power in the optical fiber market for data centers.
- Software Stock Pressure: We lowered the price targets for Salesforce and Microsoft to $215 and $500, respectively, due to ongoing pressure from AI threats in the enterprise software market, which is expected to impact their price-to-earnings multiples, reflecting a cautious outlook on software stocks.
See More
Investors Anticipate Q1 Earnings to Propel Market Recovery
- Market Recovery Signal: Following President Trump's suspension of attacks on Iran, the Dow Jones Industrial Average surged over 1,300 points this week, marking its best single-day performance since April 2025, indicating investor confidence in market recovery.
- Earnings Season Outlook: The S&P 500 companies are expected to report a blended earnings growth rate of 12.5% for Q1, marking the sixth consecutive quarter of double-digit growth, with the information technology sector projected to jump 44%, underscoring its significance to the market.
- Risk Warning: Despite the optimistic overall earnings outlook, Delta Air Lines announced it would
See More
Disney Could Outperform Netflix in Streaming
- Netflix's Impressive Growth: As of 2025, Netflix boasts 325 million paying subscribers, with annual revenue hitting $45.2 billion and operating income at $13.3 billion, underscoring its dominant position and robust growth potential in the streaming industry.
- Disney's Investment Appeal: With a forward P/E ratio of 14.5 compared to Netflix's 31.4, Disney's shares are trading at a 54% discount, suggesting a potential 40% upside if it reaches the S&P 500's forward P/E of 20.3, making it a more attractive investment option.
- Earnings Growth Catalyst: Disney's direct-to-consumer segment, including Disney+ and Hulu, reported a 72% year-over-year increase in operating income to $450 million in Q1 of fiscal 2026, with a projected operating margin of 10% for the full year, indicating strong profitability.
- Competitive Edge: Disney's extensive intellectual property allows for continuous fresh content production, and with a combined 191 million subscribers on Disney+ and Hulu by the end of fiscal 2025, it demonstrates significant competitive strength in the streaming market, potentially outperforming Netflix by April 2031.
See More
Competitive Analysis of Netflix and Disney
- Significant User Growth: Netflix's subscriber base surged from 71 million to 325 million over the past 15 years, demonstrating its strong appeal in the streaming market and further solidifying its industry leadership.
- Revenue and Profit Surge: In 2025, Netflix reported $45.2 billion in revenue and $13.3 billion in operating income, reflecting a 6.5-fold and 43.5% increase respectively since 2015, showcasing the success of its business model and robust market demand.
- Valuation Comparison: While Netflix's forward P/E ratio stands at 31.4, indicating a high valuation, Disney's lower ratio of 14.5 presents a 54% discount, attracting investor interest in its potential investment opportunities.
- Content Advantage: Disney's strong intellectual property portfolio enables it to continuously produce fresh content, with a combined subscriber count of 191 million for Disney+ and Hulu in 2025, showcasing its competitive capability against Netflix in the streaming industry.
See More
Wall Street's Latest Rating Changes Analysis
- MSG Sports Upgrade: Seaport upgraded Madison Square Garden Sports from neutral to buy, citing a significant 57.5% trading discount versus intrinsic value, suggesting a potential appreciation ahead of the 2025-26 season, particularly with plans to spin off the Knicks and Rangers into standalone entities.
- ServiceNow Downgrade: UBS downgraded ServiceNow from buy to neutral due to weakened confidence in the software sector, projecting a decline in 2026 free cash flow to 15x, reflecting increased budget pressures on non-AI applications that could impact future performance.
- Shake Shack Sales Growth: Mizuho upgraded Shake Shack from neutral to outperform, anticipating upside in same-store sales for Q1, driven by strong demand and improved restaurant-level margins, indicating robust market momentum and growth potential.
- Nvidia Strong Performance: Raymond James reiterated a strong buy rating on Nvidia, based on favorable trends in its Asia supply chain, with suppliers receiving increased forecasts during the quarter, reinforcing Nvidia's position as a market leader.
See More
