Comprehensive Stock Comparison
Compare Warner Music Group Corp. (WMG) vs Netflix, Inc. (NFLX) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | NFLX | 15.9% revenue growth vs WMG's 4.4% |
| Value | WMG | Lower P/E (21.0x vs 30.8x) |
| Quality / Margins | NFLX | 24.3% net margin vs WMG's 4.4% |
| Stability / Safety | WMG | Beta 0.59 vs NFLX's 0.76 |
| Dividends | WMG | 2.6% yield; 4-year raise streak; NFLX pays no meaningful dividend |
| Momentum (1Y) | NFLX | -1.9% vs WMG's -12.9% |
| Efficiency (ROA) | NFLX | 19.8% ROA vs WMG's 3.0%, ROIC 29.8% vs 11.4% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Warner Music Group is one of the world's three major music companies that discovers, develops, and markets recording artists and their music. It generates revenue primarily from recorded music sales and streaming (about 85% of revenue) and music publishing royalties (about 15%), with income coming from physical sales, digital downloads, streaming platforms, and licensing music for films, TV, and advertising. Its competitive advantage lies in owning a massive, valuable catalog of iconic recordings and publishing rights—including works from artists like Madonna, Bruno Mars, and Ed Sheeran—which provides stable, recurring revenue and significant negotiating power with digital platforms.
Netflix is a global streaming entertainment service that offers original and licensed TV shows, movies, and documentaries. It generates revenue primarily through subscription fees — with three pricing tiers — and earns additional income from licensing its original content to other platforms. Its key advantage is its massive scale and data-driven content creation, which allows it to invest billions in programming that attracts and retains subscribers worldwide.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
NFLX leads in 3 of 6 categories (Financial Metrics, Profitability & Efficiency). WMG leads in 2 (Valuation Metrics, Risk & Volatility).
Financial Metrics (TTM)
NFLX is the larger business by revenue, generating $45.2B annually — 6.6x WMG's $6.9B. NFLX is the more profitable business, keeping 24.3% of every revenue dollar as net income compared to WMG's 4.4%. On growth, NFLX holds the edge at +17.6% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | WMGWarner Music Grou… | NFLXNetflix, Inc. |
|---|---|---|
| RevenueTrailing 12 months | $6.9B | $45.2B |
| EBITDAEarnings before interest/tax | $1.1B | $30.1B |
| Net IncomeAfter-tax profit | $305M | $11.0B |
| Free Cash FlowCash after capex | $572M | $9.5B |
| Gross MarginGross profit ÷ Revenue | +45.9% | +48.5% |
| Operating MarginEBIT ÷ Revenue | +11.2% | +29.5% |
| Net MarginNet income ÷ Revenue | +4.4% | +24.3% |
| FCF MarginFCF ÷ Revenue | +8.3% | +20.9% |
| Rev. Growth (YoY)Latest quarter vs prior year | +10.4% | +17.6% |
| EPS Growth (YoY)Latest quarter vs prior year | -24.4% | +31.1% |
Valuation Metrics
At 38.0x trailing earnings, NFLX trades at a 7% valuation discount to WMG's 40.9x P/E. On an enterprise value basis, WMG's 12.8x EV/EBITDA is more attractive than NFLX's 13.7x.
| Metric | WMGWarner Music Grou… | NFLXNetflix, Inc. |
|---|---|---|
| Market CapShares × price | $10.7B | $407.8B |
| Enterprise ValueMkt cap + debt − cash | $14.8B | $413.2B |
| Trailing P/EPrice ÷ TTM EPS | 40.86x | 38.04x |
| Forward P/EPrice ÷ next-FY EPS est. | 21.00x | 30.75x |
| PEG RatioP/E ÷ EPS growth rate | — | 1.15x |
| EV / EBITDAEnterprise value multiple | 12.81x | 13.74x |
| Price / SalesMarket cap ÷ Revenue | 1.60x | 9.03x |
| Price / BookPrice ÷ Book value/share | 19.61x | 15.61x |
| Price / FCFMarket cap ÷ FCF | 19.92x | 43.10x |
Profitability & Efficiency
NFLX delivers a 41.3% return on equity — every $100 of shareholder capital generates $41 in annual profit, vs $37 for WMG. NFLX carries lower financial leverage with a 0.54x debt-to-equity ratio, signaling a more conservative balance sheet compared to WMG's 6.09x. On the Piotroski fundamental quality scale (0–9), NFLX scores 7/9 vs WMG's 3/9, reflecting strong financial health.
| Metric | WMGWarner Music Grou… | NFLXNetflix, Inc. |
|---|---|---|
| ROE (TTM)Return on equity | +37.0% | +41.3% |
| ROA (TTM)Return on assets | +3.0% | +19.8% |
| ROICReturn on invested capital | +11.4% | +29.8% |
| ROCEReturn on capital employed | +12.8% | +30.5% |
| Piotroski ScoreFundamental quality 0–9 | 3 | 7 |
| Debt / EquityFinancial leverage | 6.09x | 0.54x |
| Net DebtTotal debt minus cash | $4.1B | $5.4B |
| Cash & Equiv.Liquid assets | $532M | $9.0B |
| Total DebtShort + long-term debt | $4.6B | $14.5B |
| Interest CoverageEBIT ÷ Interest expense | 3.70x | 17.33x |
Total Returns (with DRIP)
A $10,000 investment in NFLX five years ago would be worth $17,479 today (with dividends reinvested), compared to $8,535 for WMG. Over the past 12 months, NFLX leads with a -1.9% total return vs WMG's -12.9%. The 3-year compound annual growth rate (CAGR) favors NFLX at 44.0% vs WMG's -0.9% — a key indicator of consistent wealth creation.
| Metric | WMGWarner Music Grou… | NFLXNetflix, Inc. |
|---|---|---|
| YTD ReturnYear-to-date | -5.4% | +5.8% |
| 1-Year ReturnPast 12 months | -12.9% | -1.9% |
| 3-Year ReturnCumulative with dividends | -2.6% | +198.8% |
| 5-Year ReturnCumulative with dividends | -14.6% | +74.8% |
| 10-Year ReturnCumulative with dividends | +7.2% | +930.4% |
| CAGR (3Y)Annualised 3-year return | -0.9% | +44.0% |
Risk & Volatility
WMG is the less volatile stock with a 0.59 beta — it tends to amplify market swings less than NFLX's 0.76 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. WMG currently trades 81.9% from its 52-week high vs NFLX's 71.8% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | WMGWarner Music Grou… | NFLXNetflix, Inc. |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.59x | 0.76x |
| 52-Week HighHighest price in past year | $34.94 | $134.12 |
| 52-Week LowLowest price in past year | $25.56 | $75.01 |
| % of 52W HighCurrent price vs 52-week peak | +81.9% | +71.8% |
| RSI (14)Momentum oscillator 0–100 | 43.0 | 55.8 |
| Avg Volume (50D)Average daily shares traded | 1.9M | 38.8M |
Analyst Outlook
Wall Street rates WMG as "Buy" and NFLX as "Buy". Consensus price targets imply 27.6% upside for WMG (target: $37) vs 21.8% for NFLX (target: $117). WMG is the only dividend payer here at 2.58% yield — a key consideration for income-focused portfolios.
| Metric | WMGWarner Music Grou… | NFLXNetflix, Inc. |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $36.50 | $117.25 |
| # AnalystsCovering analysts | 24 | 97 |
| Dividend YieldAnnual dividend ÷ price | +2.6% | — |
| Dividend StreakConsecutive years of raises | 4 | — |
| Dividend / ShareAnnual DPS | $0.74 | — |
| Buyback YieldShare repurchases ÷ mkt cap | +0.1% | +2.2% |
Historical Charts
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Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Jun 20 | Feb 26 | Change |
|---|---|---|---|
| Warner Music Group … (WMG) | 100 | 100.27 | +0.3% |
| Netflix, Inc. (NFLX) | 100 | 170.43 | +70.4% |
Netflix, Inc. (NFLX) returned +75% over 5 years vs Warner Music Group … (WMG)'s -15%. A $10,000 investment in NFLX 5 years ago would be worth $17,479 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Warner Music Group … (WMG) | $3.2B | $6.7B | +106.6% |
| Netflix, Inc. (NFLX) | $8.8B | $45.2B | +411.7% |
Warner Music Group Corp.'s revenue grew from $3.2B (2016) to $6.7B (2025) — a 8.4% CAGR. Netflix, Inc.'s revenue grew from $8.8B (2016) to $45.2B (2025) — a 19.9% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Warner Music Group … (WMG) | 0.8% | 5.4% | +606.6% |
| Netflix, Inc. (NFLX) | 2.1% | 24.3% | +1049.7% |
Warner Music Group Corp.'s net margin went from 1% (2016) to 5% (2025). Netflix, Inc.'s net margin went from 2% (2016) to 24% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Warner Music Group … (WMG) | 74.4 | 43.8 | -41.1% |
| Netflix, Inc. (NFLX) | 153.6 | 37.1 | -75.8% |
Warner Music Group Corp. has traded in a 33x–74x P/E range over 5 years; current trailing P/E is ~41x. Netflix, Inc. has traded in a 30x–154x P/E range over 9 years; current trailing P/E is ~38x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Warner Music Group … (WMG) | 0.05 | 0.7 | +1305.6% |
| Netflix, Inc. (NFLX) | 0.04 | 2.53 | +5783.7% |
Warner Music Group Corp.'s EPS grew from $0.05 (2016) to $0.70 (2025) — a 34% CAGR. Netflix, Inc.'s EPS grew from $0.04 (2016) to $2.53 (2025) — a 57% CAGR.
Chart 6Free Cash Flow — 5 Years
Warner Music Group Corp. generated $539M FCF in 2025 (+742% vs 2021). Netflix, Inc. generated $9B FCF in 2025 (+7269% vs 2021).
WMG vs NFLX: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is WMG or NFLX a better buy right now?
Netflix, Inc. (NFLX) offers the better valuation at 38.0x trailing P/E (30.8x forward), making it the more compelling value choice. Analysts rate Warner Music Group Corp. (WMG) a "Buy" — based on 24 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — WMG or NFLX?
On trailing P/E, Netflix, Inc. (NFLX) is the cheapest at 38.0x versus Warner Music Group Corp. at 40.9x. On forward P/E, Warner Music Group Corp. is actually cheaper at 21.0x — notably different from the trailing picture, reflecting expected earnings growth.
03Which is the better long-term investment — WMG or NFLX?
Over the past 5 years, Netflix, Inc. (NFLX) delivered a total return of +74.8%, compared to -14.6% for Warner Music Group Corp. (WMG). A $10,000 investment in NFLX five years ago would be worth approximately $17K today (assuming dividends reinvested). Over 10 years, the gap is even starker: NFLX returned +930.4% versus WMG's +7.2%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — WMG or NFLX?
By beta (market sensitivity over 5 years), Warner Music Group Corp. (WMG) is the lower-risk stock at 0.59β versus Netflix, Inc.'s 0.76β — meaning NFLX is approximately 29% more volatile than WMG relative to the S&P 500. On balance sheet safety, Netflix, Inc. (NFLX) carries a lower debt/equity ratio of 54% versus 6% for Warner Music Group Corp. — giving it more financial flexibility in a downturn.
05Which has better profit margins — WMG or NFLX?
Netflix, Inc. (NFLX) is the more profitable company, earning 24.3% net margin versus 5.4% for Warner Music Group Corp. — meaning it keeps 24.3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: NFLX leads at 29.5% versus 10.3% for WMG. At the gross margin level — before operating expenses — NFLX leads at 48.5%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is WMG or NFLX more undervalued right now?
On forward earnings alone, Warner Music Group Corp. (WMG) trades at 21.0x forward P/E versus 30.8x for Netflix, Inc. — 9.8x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for WMG: 27.6% to $36.50.
07Which pays a better dividend — WMG or NFLX?
In this comparison, WMG (2.6% yield) pays a dividend. NFLX does not pay a meaningful dividend and should not be held primarily for income.
08Is WMG or NFLX better for a retirement portfolio?
For long-horizon retirement investors, Warner Music Group Corp. (WMG) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.59), 2.6% yield). Both have compounded well over 10 years (WMG: +7.2%, NFLX: +930.4%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between WMG and NFLX?
Both stocks operate in the Communication Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. WMG pays a dividend while NFLX does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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- Sector: Communication Services
- Market Cap > $100B
- Revenue Growth > 5%
- Gross Margin > 27%