NetflixNFLX -1.29%95 Gross Margin % is 51.93% as of Mar. 2026, which is 33% above its 10-year median of 39.13. GuruFocus rates NFLX with a GF Score™ of 95/100 and a GF Value™ of $98.44 (Modestly Undervalued). The stock has 1 warning sign investors should review. Among 953 Media - Diversified companies, Netflix ranks better than 64.64% on this metric.
Gross Margin % is calculated as gross profit divided by its revenue. Netflix's Gross Profit for the
three
months ended in Mar. 2026 was $6,362 Mil. Netflix's Revenue for the
three
months ended in Mar. 2026 was $12,250 Mil. Therefore, Netflix's Gross Margin % for the quarter that ended in Mar. 2026 was 51.93%.
The historical rank and industry rank for Netflix's Gross Margin % or its related term are showing as below:
NFLX'
s Gross Margin % Range Over the Past 10 Years
Min: 29.14 Med: 39.13 Max: 49.03
Current: 49.03
During the past 13 years, the highestGross Margin % of Netflix was 49.03%. The lowest was 29.14%. And the median was 39.13%.
NFLX's Gross Margin % is ranked better than 64.64% of 953
companies
in the Media - Diversified industry
Industry Median: 38.9
vs NFLX: 49.03
Netflix had a gross margin of 51.93% for the quarter that ended in Mar. 2026 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Netflix was 4.30% per year.
Netflix (NAS:NFLX) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Netflix had a gross margin of 51.93% for the quarter that ended in Mar. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Netflix Gross Margin % Related Terms
Netflix Gross Margin % Historical Data
* Premium members only.
The historical data trend for Netflix's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Entertainment subindustry, Netflix's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Netflix Gross Margin % vs Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Netflix's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Netflix's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Netflix (NFLX) has a Gross Margin % of 51.93% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Netflix and its competitors. This is 33% above median its historical median of 39.13. Over the past decade, Netflix's Gross Margin % has ranged from 29.14 to 49.03. According to the industry distribution chart, Netflix ranks #337 out of 953 companies in the Media - Diversified industry, placing it in the top 35.4%.
Is Netflix's Gross Margin % too high?
Netflix's current Gross Margin % of 51.93% is 33% above median its 10-year median of 39.13. Over the past 10 years, this metric has ranged from a low of 29.14 to a high of 49.03. The Media - Diversified industry median Gross Margin % is 38.90. Netflix's value of 51.93% is 33.5% above this industry median. Based on the distribution chart, Netflix ranks #337 out of 953 companies in the Media - Diversified industry, which is above the industry midpoint. Overall, Netflix has a GF Score™ of 95/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Netflix's Gross Margin % compare to DIS and WBD?
According to the Media - Diversified industry distribution chart, Netflix ranks #337 out of 953 companies for Gross Margin %. This puts Netflix in the upper half of its industry. The industry median Gross Margin % is 38.90. Netflix's value of 51.93% is 33.5% above this benchmark. Historically, Netflix's own Gross Margin % has ranged from 29.14 to 49.03 over the past decade. While the company's 10-year median is 39.13 vs. the industry median of 38.90, Netflix has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Media - Diversified company?
The median Gross Margin % among Media - Diversified companies is 38.90, based on 953 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Netflix's current Gross Margin % of 51.93% is 33.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Netflix and its competitors. For the Media - Diversified industry, the median Gross Margin % is 38.90 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Netflix's current Gross Margin % is 51.93%, which is 33% above median its own 10-year median of 39.13. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Netflix stock overvalued right now?
Based on GuruFocus' analysis, Netflix (NFLX) is currently considered Modestly Undervalued. The stock's GF Value™ is $98.44, compared to a current price of $70.90 — trading 28% below its estimated fair value. The current Gross Margin % is 51.93%, which is 33% above median its 10-year median of 39.13 and 33.5% above the Media - Diversified industry median of 38.90. Netflix's overall GF Score™ is 95/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Netflix (NFLX), the current Gross Margin % is 51.93% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Netflix (NFLX) Overvalued in 2026?
Based on GuruFocus' analysis, Netflix stock appears to be undervalued.
The current stock price of $70.90 is trading 28% below its estimated GF Value™ of $98.44.
GuruFocus considers Netflix to be Modestly Undervalued.
Key valuation signals for NFLX:
Gross Margin %: 51.93% (33% above median its 10-year median of 39.13)
GF Value™: $98.44 vs. price of $70.90 (28% below fair value)
Industry Position: 33.5% above the Media - Diversified median (#337 of 953)
No single metric tells the full story. See the NFLX stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Netflix's relatively simple business model involves only one business, its streaming service. It has the biggest television entertainment subscriber base in both the United States and the collective international market, with more than 300 million subscribers globally. Netflix has exposure to nearly the entire global population outside of China. The firm has traditionally avoided a regular slate of live programming or sports content, instead focusing on on-demand access to episodic television, movies, and documentaries. The firm introduced ad-supported subscription plans in 2022, giving the firm exposure to the advertising market in addition to the subscription fees that have historically accounted for nearly all its revenue.
95GF Score
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