Netflix Generates Massive FCF and FCF Margins - NFLX Price Targets Are Higher

Analyst Mark R. Hake highlights Netflix's strong free cash flow (FCF) profile—$5.1bn in Q1 including a $2.8bn termination fee, equating to $2.25bn operational FCF and an 18.4% FCF margin. Adjusted TTM FCF sits near 19.4%. Management guided to $12.5bn FCF for 2026 (about $9.7bn adjusted); the analyst models NTM FCF of $11.1bn and applies a 45x FCF multiple to imply a $502.9bn market cap and a $119 price target (~+22% upside versus the $97.31 close). The piece frames NFLX as undervalued and suggests income strategies (shorting OTM puts) to set a lower buy-in while generating yield. Market impact: stronger-than-expected cash generation and raised modeled targets could lift valuation and analyst levels, supporting a bullish view and option-selling trade flows, though gains may take time given recent share volatility.