Netflix enters its October 20 earnings report with an unusual valuation setup: its revenue has grown much faster than Disney's and its operating margin is almost twice as wide, yet the two stocks trade at similar trailing earnings multiples.
Data compiled by Trefis as of October 13 put Netflix at 21.6 times trailing earnings versus 21.9 times for Disney. Netflix's revenue grew 16.0% over the preceding twelve months and its operating margin reached 29.7%. Disney posted 4.6% revenue growth and a 15.2% operating margin over the same period.
That comparison is appealing but incomplete. Netflix shares had fallen 42.2% over twelve months, reflecting concern that recent growth drivers will fade. Quarterly revenue growth slowed from 16.2% in the first quarter of 2026 to 13.4% in the second, and management guided to 12.0% for the third quarter. A similar earnings multiple can therefore express very different expectations about future growth.
The margin trend offers the counterargument. Netflix guided to a 33.2% third-quarter operating margin, up from 32.6% in the second quarter. Advertising is still a minority of the business, but management expects about $3.0 billion of ad revenue within roughly $51.2 billion of total 2026 revenue. Price increases, memberships and advertising can continue lifting profit even if subscriber growth becomes less explosive.
Peer comparisons also require care. Amazon and Apple combine streaming with much larger businesses, while Comcast and Disney own different mixes of networks, parks and connectivity assets. Their consolidated multiples and margins do not isolate the economics of streaming. Disney is the closest entertainment comparison, but it is still not a like-for-like substitute.
The October 20 report should resolve part of the debate. If Netflix delivers roughly 12% growth while maintaining its margin target, the selloff may have compressed the multiple faster than the business deteriorated. A weaker outlook would support the market's caution. Revenue growth, advertising contribution and the cost implications of the newly announced workforce reduction are the most useful evidence.