Is NFLX a high-quality business?

AlphaMadera's AlphaQuality grade scores Netflix, Inc. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how NFLX compares to a Buffett-style quality bar.

What is Netflix, Inc.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to NFLX based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes NFLX a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

NFLX - Netflix, Inc.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $111.83 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Platform & Compounding FCF

AlphaQuality — archetype-weighted quantitative grade

A- 86.0 / 100 composite

Composite Grade

Composite of six pillars weighted for platform & compounding fcf businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 25%

A 91.7

5yr Avg ROIC 18.4% 88/100
Operating Margin Trend +2.62 pp/yr 100/100

Capital Efficiency

Weight: 15%

A+ 93.9

5yr Avg ROE 26.1% 100/100
5yr Share-Count CAGR -1.3% 82/100

Growth Quality

Weight: 25%

A 91.4

5yr Revenue CAGR 11.1% 83/100
5yr EPS CAGR 22.6% 98/100
Revenue-Growth Years (5) 5/5 100/100

Cash Generation

Weight: 20%

B 70.0

5yr FCF Margin 12.8% 77/100
5yr FCF/NI Conversion 0.65x 62/100

Balance Sheet

Weight: 10%

A+ 95.8

Net Debt / EBITDA 0.18x 93/100
Interest Coverage (EBIT/Int) 17.38x 96/100
Altman Z-Score 9.53 100/100

Stability

Weight: 5%

C 52.2

EPS Volatility (σ/μ) 0.97 1/100
Piotroski F-Score 8 89/100
Negative-Revenue Years (5) 0/5 100/100

6 of 6 gurus held; 1 new buy; 3 added; 1 trimmed; 1 full exit.

Holders: 6 +1
Avg Δ position: +74.5%
New buys: 1
Full exits: 1

Soros new
Halvorsen sold -100%
Dalio increased +331%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (25%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (25%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (20%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (10%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (5%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.