Offshore
Photo
App Economy Insights
App Economy Insights in 2025.
โข 50M+ impressions
โข 216 articles published
โข 600,000+ followers/subs
We published hundreds of stories, but these were the top 1%.
๐ The yearโs best visuals & analysis.
https://t.co/BPxVDyNuS6
tweet
App Economy Insights in 2025.
โข 50M+ impressions
โข 216 articles published
โข 600,000+ followers/subs
We published hundreds of stories, but these were the top 1%.
๐ The yearโs best visuals & analysis.
https://t.co/BPxVDyNuS6
tweet
Offshore
Photo
Dimitry Nakhla | Babylon Capitalยฎ
A quality valuation analysis on $NFLX ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 30.42x
โข5-Year Mean: 34.87x
โขNTM FCF Yield: 2.61%
โข5-Year Mean: 2.41%
As you can see, $NFLX appears to be trading below fair value
Going forward, investors can expect to receive ~15% MORE in earnings per share & ~8% MORE in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $NFLX is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $9.32B
โขLong-Term Debt: $14.46B
$NFLX has a strong balance sheet, an A S&P Credit Rating & 13x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2021: 18.2%
โข2022: 14.9%
โข2023: 18.5%
โข2024: 24.3%
โขLTM: 29.4%
RETURN ON EQUITYโ
โข2021: 38.0%
โข2022: 24.5%
โข2023: 26.1%
โข2024: 38.4%
โขLTM: 42.9%
$NFLX has great return metrics, highlighting the financial efficiency of the business
REVENUEโ
โข2019: $20.16B
โข2025E: $45.09B
โขCAGR: 14.36%
FREE CASH FLOWโโก๏ธโ
โข2019: ($3.14B)
โข2025E: $9.18B
NORMALIZED EPSโ
โข2019: $0.41
โข2025E: $2.54
โขCAGR: 35.52%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 4.38B
โขLTM Shares Outstanding: 4.26B
By reducing its shares outstanding ~3%, $NFLX increased its EPS by ~3% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 48.1%
โขLTM Operating Margins: 29.1%
โขLTM Net Income Margins: 24.0%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~15% MORE in EPS & ~8% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $NFLX has to grow earnings at a 15.21% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2026 - 2027 EPS growth over the next few years to be more than the (15.21%) required growth rate:
2025E: $2.54 (28% YoY) *FY Dec
2026E: $3.24 (28% YoY)
2027E: $3.91 (20% YoY)
$NFLX has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $NFLX ends 2027 with $3.91 in EPS & see its CAGR potential assuming different multiples
32x P/E: $125๐ต โฆ ~15.6% CAGR
31x P/E: $121๐ต โฆ ~13.8% CAGR
30x P/E: $117๐ต โฆ ~12.0% CAGR
29x P/E: $113๐ต โฆ ~10.1% CAGR
28x P/E: $109๐ต โฆ ~8.2% CAGR
27x P/E: $105๐ต โฆ ~6.3% CAGR
As you can see, weโd have to assume a >29x multiple for $NFLX to have attractive return potential
At 29x earnings $NFLX has ok CAGR potential
At 30x $NFLX has attractive return potential without assuming any multiple expansion
$NFLX remains the content king โ with unmatched scale, global reach, & pricing power
With a long runway ahead & shares modestly undervalued, I consider $NFLX an attractive consideration today at $93๐ต (with little margin of safety)
I consider $NFLX a strong consideration with a large margin of safety at $82๐ต, where I can reasonably expect ~13% CAGR while assuming a more conservative 27x
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
tweet
A quality valuation analysis on $NFLX ๐ง๐ฝโโ๏ธ
โขNTM P/E Ratio: 30.42x
โข5-Year Mean: 34.87x
โขNTM FCF Yield: 2.61%
โข5-Year Mean: 2.41%
As you can see, $NFLX appears to be trading below fair value
Going forward, investors can expect to receive ~15% MORE in earnings per share & ~8% MORE in FCF per share๐ง ***
Before we get into valuation, letโs take a look at why $NFLX is a quality business
BALANCE SHEETโ
โขCash & Equivalents: $9.32B
โขLong-Term Debt: $14.46B
$NFLX has a strong balance sheet, an A S&P Credit Rating & 13x FFO Interest Coverage Ratio
RETURN ON CAPITALโ
โข2021: 18.2%
โข2022: 14.9%
โข2023: 18.5%
โข2024: 24.3%
โขLTM: 29.4%
RETURN ON EQUITYโ
โข2021: 38.0%
โข2022: 24.5%
โข2023: 26.1%
โข2024: 38.4%
โขLTM: 42.9%
$NFLX has great return metrics, highlighting the financial efficiency of the business
REVENUEโ
โข2019: $20.16B
โข2025E: $45.09B
โขCAGR: 14.36%
FREE CASH FLOWโโก๏ธโ
โข2019: ($3.14B)
โข2025E: $9.18B
NORMALIZED EPSโ
โข2019: $0.41
โข2025E: $2.54
โขCAGR: 35.52%
SHARE BUYBACKSโ
โข2019 Shares Outstanding: 4.38B
โขLTM Shares Outstanding: 4.26B
By reducing its shares outstanding ~3%, $NFLX increased its EPS by ~3% (assuming 0 growth)
MARGINSโ
โขLTM Gross Margins: 48.1%
โขLTM Operating Margins: 29.1%
โขLTM Net Income Margins: 24.0%
***NOW TO VALUATION ๐ง
As stated above, investors can expect to receive ~15% MORE in EPS & ~8% MORE in FCF per share
Using Benjamin Grahamโs 2G rule of thumb, $NFLX has to grow earnings at a 15.21% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2026 - 2027 EPS growth over the next few years to be more than the (15.21%) required growth rate:
2025E: $2.54 (28% YoY) *FY Dec
2026E: $3.24 (28% YoY)
2027E: $3.91 (20% YoY)
$NFLX has an ok track record of meeting analyst estimates ~2 years out, but letโs assume $NFLX ends 2027 with $3.91 in EPS & see its CAGR potential assuming different multiples
32x P/E: $125๐ต โฆ ~15.6% CAGR
31x P/E: $121๐ต โฆ ~13.8% CAGR
30x P/E: $117๐ต โฆ ~12.0% CAGR
29x P/E: $113๐ต โฆ ~10.1% CAGR
28x P/E: $109๐ต โฆ ~8.2% CAGR
27x P/E: $105๐ต โฆ ~6.3% CAGR
As you can see, weโd have to assume a >29x multiple for $NFLX to have attractive return potential
At 29x earnings $NFLX has ok CAGR potential
At 30x $NFLX has attractive return potential without assuming any multiple expansion
$NFLX remains the content king โ with unmatched scale, global reach, & pricing power
With a long runway ahead & shares modestly undervalued, I consider $NFLX an attractive consideration today at $93๐ต (with little margin of safety)
I consider $NFLX a strong consideration with a large margin of safety at $82๐ต, where I can reasonably expect ~13% CAGR while assuming a more conservative 27x
___
๐๐๐๐๐๐๐๐๐๐โผ๏ธ
๐๐ก๐ข๐ฌ ๐๐จ๐ง๐ญ๐๐ง๐ญ ๐ข๐ฌ ๐ฉ๐ซ๐จ๐ฏ๐ข๐๐๐ ๐๐จ๐ซ ๐ข๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ง๐ ๐๐๐ฎ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฉ๐ฎ๐ซ๐ฉ๐จ๐ฌ๐๐ฌ ๐จ๐ง๐ฅ๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ข๐๐, ๐๐ง ๐จ๐๐๐๐ซ, ๐จ๐ซ ๐ ๐ฌ๐จ๐ฅ๐ข๐๐ข๐ญ๐๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐๐ฎ๐ฒ ๐จ๐ซ ๐ฌ๐๐ฅ๐ฅ ๐๐ง๐ฒ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ.
๐๐๐๐ฒ๐ฅ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅยฎ ๐๐ง๐ ๐ข๐ญ๐ฌ ๐ซ๐๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ๐๐ญ๐ข๐ฏ๐๐ฌ ๐ฆ๐๐ฒ ๐ก๐จ๐ฅ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฌ๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ๐๐. ๐๐ง๐ฒ ๐จ๐ฉ๐ข๐ง๐ข๐จ๐ง๐ฌ ๐๐ฑ๐ฉ๐ซ๐๐ฌ๐ฌ๐๐ ๐๐ซ๐ ๐๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ญ๐ ๐จ๐ ๐ฉ๐ฎ๐๐ฅ๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐ฌ๐ฎ๐๐ฃ๐๐๐ญ ๐ญ๐จ ๐๐ก๐๐ง๐ ๐ ๐ฐ๐ข๐ญ๐ก๐จ๐ฎ๐ญ ๐ง๐จ๐ญ๐ข๐๐.
๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐๐๐๐ง ๐จ๐๐ญ๐๐ข๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐๐ ๐ญ๐จ ๐๐ ๐ซ๐๐ฅ๐ข๐๐๐ฅ๐ ๐๐ฎ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐๐๐๐ฎ๐ซ๐๐๐ฒ ๐จ๐ซ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ง๐๐ฌ๐ฌ. ๐๐๐ฌ๐ญ ๐ฉ๐๐ซ๐๐จ๐ซ๐ฆ๐๐ง๐๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐ ๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐๐ฎ๐ญ๐ฎ๐ซ๐ ๐ซ๐๐ฌ๐ฎ๐ฅ๐ญ๐ฌ.
tweet
Offshore
Photo
EndGame Macro
More Sellers, Fewer Buyers And a Market That Canโt Clear
Buyers didnโt suddenly lose interest in owning homes. They lost the ability to make the monthly payment work. At these prices and these rates, the math just doesnโt clear so buyers step back. Thatโs why the buyer line keeps sliding. Itโs not panic. Itโs affordability.
Sellers are a different story. Many are listing because life forces it with job moves, divorces, rising taxes and insurance, aging in place becoming expensive. But most are still anchored to 2021โ22 prices, when everything felt easy. So listings rise without matching demand, and the gap blows out.
Why This Isnโt A Crashโฆ Yet
Historically, when housing gets stuck like this, the first adjustment isnโt a national collapse. Itโs a grind. Volume dries up before prices do. Homes sit longer. Sellers cut quietly. Concessions creep in. Rate buydowns replace price cuts. Some listings get pulled and relisted months later.
Back in 2008 credit broke and forced selling flooded the market. Today, inventory is still well below crisis levels, distressed sales are rare, and years of underbuilding put a floor under pricesโฆat least for now.
Behavior has shifted faster than pricing.
Where Trumpโs Comments Actually Fit
Trump is saying the quiet part out loud that housing is caught between two competing realities. Homeowners want prices to stay high because thatโs their net worth. Younger buyers need prices and payments to come down to get in.
Those goals are in conflict. And when he talks about lower rates, a new Fed chair, even floating housing as an โemergency,โ while also saying he doesnโt want to knock prices down, thatโs the tell.
If the plan is lower rates, keep prices up, youโre not fixing housing. Youโre trying to restore affordability without letting the asset deflate. That can work for a while, but it usually turns into a loop where prices stay sticky, payments ease a bit, demand comes backโฆ and the market tightens again.
My View
This gap means housing is shifting from a sellerโs market to a buyerโs market in behavior, not yet in pricing.
The real breaking point isnโt the headline number of sellers versus buyers. Itโs the labor market. If jobs hold, this becomes a long, frustrating grind with regional repricing and real (inflation adjusted) declines. If jobs crack, the standoff turns into forced selling and thatโs when the price floor finally gives way.
For now, this chart isnโt screaming collapse. Itโs quietly telling you the old housing playbook is broken and the next one hasnโt been written yet.
tweet
More Sellers, Fewer Buyers And a Market That Canโt Clear
Buyers didnโt suddenly lose interest in owning homes. They lost the ability to make the monthly payment work. At these prices and these rates, the math just doesnโt clear so buyers step back. Thatโs why the buyer line keeps sliding. Itโs not panic. Itโs affordability.
Sellers are a different story. Many are listing because life forces it with job moves, divorces, rising taxes and insurance, aging in place becoming expensive. But most are still anchored to 2021โ22 prices, when everything felt easy. So listings rise without matching demand, and the gap blows out.
Why This Isnโt A Crashโฆ Yet
Historically, when housing gets stuck like this, the first adjustment isnโt a national collapse. Itโs a grind. Volume dries up before prices do. Homes sit longer. Sellers cut quietly. Concessions creep in. Rate buydowns replace price cuts. Some listings get pulled and relisted months later.
Back in 2008 credit broke and forced selling flooded the market. Today, inventory is still well below crisis levels, distressed sales are rare, and years of underbuilding put a floor under pricesโฆat least for now.
Behavior has shifted faster than pricing.
Where Trumpโs Comments Actually Fit
Trump is saying the quiet part out loud that housing is caught between two competing realities. Homeowners want prices to stay high because thatโs their net worth. Younger buyers need prices and payments to come down to get in.
Those goals are in conflict. And when he talks about lower rates, a new Fed chair, even floating housing as an โemergency,โ while also saying he doesnโt want to knock prices down, thatโs the tell.
If the plan is lower rates, keep prices up, youโre not fixing housing. Youโre trying to restore affordability without letting the asset deflate. That can work for a while, but it usually turns into a loop where prices stay sticky, payments ease a bit, demand comes backโฆ and the market tightens again.
My View
This gap means housing is shifting from a sellerโs market to a buyerโs market in behavior, not yet in pricing.
The real breaking point isnโt the headline number of sellers versus buyers. Itโs the labor market. If jobs hold, this becomes a long, frustrating grind with regional repricing and real (inflation adjusted) declines. If jobs crack, the standoff turns into forced selling and thatโs when the price floor finally gives way.
For now, this chart isnโt screaming collapse. Itโs quietly telling you the old housing playbook is broken and the next one hasnโt been written yet.
BREAKING ๐จ: U.S. Housing Market
Home Sellers now outnumber Buyers by 530,000, the largest gap ever recorded ๐คฏ tweet