Netflix CEO Says Growth Is Too Slow as Live Programming Takes Center Stage Summary
Netflix co-CEO Ted Sarandos said the streaming company is not expanding as quickly as he would like while highlighting live content’s ability to attract customer
Netflix (NFLX) is looking to lift its growth rate as co-CEO Ted Sarandos said subscriber and business expansion has not matched his expectations, while the streaming company continues to invest in live programming, according to remarks at the Bloomberg Screentime conference in Los Angeles on Wednesday.
Sarandos said Netflix is devoting about 5% of its roughly $20 billion annual content budget to live events. That spending accounts for about 1% of viewing, but he said live programming can attract new customers and help limit cancellations.
Netflix has also been building its position around creator-led video, including deals involving YouTube talent. Sarandos said those arrangements do not represent a major strategic shift, even as YouTube remains a larger force in online video.
Sarandos also addressed Netflix's pursuit of Warner Bros. content and the broader streaming landscape. He said the effect of the potential combination involving Warner Bros. Discovery remains uncertain, while Netflix continues to assess where live content, creators and its existing programming slate can support further growth.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Netflix (NFLX -1.02%) went public in May 2002, with its initial public offering (IPO) priced at $15 a share. It was a DVD-by-mail business back then, and it lost around $22 million that year.
An investor who put $1,000 in the stock at the IPO price would hold about 9,333 shares now. At around $70 a share as I write, the stake is worth about $654,000 -- compounding at about 30% annually for over 24 years.
The same $1,000 put in the S&P 500 (^GSPC -0.25%) on Netflix's first trading day would be worth about $7,000 now, before dividends.
And the Netflix stake got there even with the stock sitting around 44% under the 52-week high of $124.86, hit last October.
Image source: Netflix.
Three splits, 140 sharesNetflix split its stock 2-for-1 in February 2004, 7-for-1 in July 2015, and 10-for-1 in November 2025. Multiply them together, and every share bought in the IPO is now 140 shares.
At $15 a share, $1,000 bought around 67 shares in 2002. After the three splits, they became about 9,333 shares, worth about $654,000 at $70 each.
Sure, a split just slices a company into more pieces. The gain came from the business itself getting enormously bigger. Netflix's revenue rose from around $153 million in 2002 to $45.2 billion in 2025, a nearly 300-fold increase, or about 28% compounded annually. And the company that lost $22 million in 2002 earned around $11 billion in 2025.
Put another way, the stock's 30% yearly return was backed by a business whose sales climbed almost as fast.
Holding all the way wasn't easy. Within five months of the IPO, the stock had dropped around 65%, bringing the $1,000 stake down to about $350 in October 2002.
The more recent stretch is the one I'd focus most on if I were buying the stock today. The stake was worth around $646,000 at the stock's closing high in November 2021. It dropped to about $155,000 by May 2022, then rose to about $1.25 million at the stock's record close in June 2025. Now, it's back to around where it sat almost five years ago.
The business didn't stall in that time, though. Netflix's net income was $5.1 billion in 2021 and around $11 billion in 2025. With the share price roughly flat, investors now pay less than half as much for every dollar of Netflix's yearly profit as they did in late 2021.
What does Netflix need to do from here?Netflix can't match the IPO-era return. After all, the company's market value is around $292 billion today, and for a fresh $1,000 to grow 650-fold again, Netflix would need to be worth about $190 trillion.
The realistic route goes through earnings growth instead. Management expects 2026 operating income to climb more than 20%, as revenue grows 13% to 14% (to between $51.0 billion and $51.4 billion) and the operating margin widens to 31.5% from 29.5% in 2025. Advertising should help, with ad revenue expected to roughly double to around $3 billion this year.
Buybacks can boost that on a per-share basis. Netflix's diluted share count dropped around 2% in the year through June, after the company bought back a record $4.7 billion of its stock in the second quarter.
Still, sales growth keeps slowing. Netflix's year-over-year revenue growth rate has decelerated from 17.6% in 2025's fourth quarter to a forecast of around 12% for the third quarter of 2026. That pace is under half the 28% yearly rate that built the first $650,000.
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Yes, profits can outgrow sales for a while as margins rise. But over the long haul, earnings usually track revenue, so the growth rate has to level off somewhere in the low double digits.
The stock price calls for around that much. Shares trade at about 18 times Netflix's expected 2027 earnings, based on analysts' consensus estimate -- arguably a modest price for a company expecting its operating income to rise over 20% this year.
What could $1,000 put into Netflix now realistically do? I think it'll probably grow about as fast as the company's earnings, which might mean low double digits a year if the growth rate levels off.
That would be a solid result, even if it looks nothing like the first 24 years. And at around $70 a share, I think Netflix stock is fairly priced for that sort of outcome, not much more.
Netflix má k 30. červnu závazky za obsah ve výši 25,1 mld. USD, z toho 11,9 mld. USD splatných do 12 měsíců. Volný peněžní tok ve 2. čtvrtletí klesl na 1,5 mld. USD z 2,3 mld. USD.
Key Takeaways Netflix's content obligations rose to $25.1B, with $11.9B due within the next 12 months.First-half content additions climbed to $9.8B, while second-quarter free cash flow fell to $1.5B.Netflix's expanding slate may support engagement and revenue, but higher spending could pressure cash flow. Netflix’s (NFLX - Free Report) rising content commitments are pressuring cash flow as the streaming giant continues to invest heavily to maintain a broad and competitive entertainment slate. As of June 30, 2026, the company had $25.1 billion in content obligations, up from $24 billion at the end of 2025, with $11.9 billion due within the next 12 months. Of the total, $19.6 billion had not yet been recognized on the balance sheet. Netflix also estimates that obligations for unknown future titles could add another $1 billion-$4 billion over the next three years.
The cash burden is also evident in Netflix’s content investment. The company added $9.8 billion to content assets in the first half of 2026, up from $7.4 billion a year earlier, while content amortization increased to $8.5 billion from $7.7 billion. Importantly, Netflix said second-quarter operating cash flow declined primarily because payments for content assets increased by $1.06 billion. As a result, free cash flow fell to $1.5 billion from $2.3 billion a year earlier. However, the company also cited higher cash tax payments, partly related to the Warner Bros. termination fee.
The spending requirement is unlikely to ease as Netflix continues building its future entertainment pipeline. Its 2026 slate includes returning franchises such as Bridgerton, ONE PIECE, Avatar: The Last Airbender and The Gentlemen. September announcements also added Lust Stories 3, Shaque: Trust No One and The Great Indian Kapil Show Season 5 to its content lineup.
Thus, Netflix’s expanding entertainment pipeline can support engagement and revenue growth, but rising content commitments and higher upfront cash spending could keep cash flow under pressure, making disciplined capital allocation increasingly important.
Disney & Paramount Challenge Netflix on Content SpendingThe Walt Disney Company (DIS - Free Report) is challenging Netflix through sustained investment in creative IP and streaming content, with Disney+ using films and series as the core of its global ecosystem. The company also plans to bring select premium sports events to Disney+, while ESPN remains its primary daily sports destination. This content-and-sports pipeline gives Disney multiple ways to deepen engagement and fan value, positioning it as a broad entertainment competitor to Netflix.
Paramount Skydance (PSKY - Free Report) , with a broader entertainment slate, is stepping up competition with Netflix through an expanding pipeline, with Paramount having greenlit 40 new or returning DTC series and targeting 15+ films in 2027. Paramount is also expanding sports rights through UFC, Zuffa Boxing and UEFA, alongside NFL, WNBA and PGA TOUR programming. These investments are designed to strengthen engagement, retention and streaming scale.
NFLX’s Price Performance, Valuation & EstimatesNetflix’s shares have declined 25% year to date, underperforming the Zacks Broadcast Radio and Television industry and Zacks Consumer Discretionary sector, which have fallen 18.3% and 14.4%, respectively.
NFLX’s YTD Price Performance
Image Source: Zacks Investment Research
Netflix’s valuation remains elevated, with the stock trading at a forward 12-month price/book TTM ratio of 9.71X versus the industry’s 5.17X. NFLX carries a Value Score of D.
NFLX’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NFLX’s 2026 earnings is pegged at $3.59 per share and remains unchanged over the past 30 days. This indicates a 41.9% increase from the previous year.
Netflix za poslední rok klesl o 41,73 % a obchoduje se blízko 52týdenního minima 65,08 USD. BMO Capital Markets přesto ponechává cílovou cenu 135 USD a rating Outperform.
Netflix has shed more than 40% in a year while one top Wall Street analyst holds a target that towers above the crowd. The question is whether the bull case rests on a real inflection or wishful thinking about ads…
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Netflix (NASDAQ:NFLX | NFLX Price Prediction) is priced at $70.30. Wall Street’s average price target is $92.93, which puts the stock about 32.19% below where analysts think it belongs.
Netflix is the world’s largest subscription streamer with an audience approaching “a billion people”. Investors now judge the company on advertising, live events, and pricing power, all three growing despite the stock’s slide.
The gap is widest at the top of the Street. BMO Capital Markets analyst Brian Pitz holds the Street-high $135.00 target and an Outperform rating. That target implies roughly 92.03% upside, far past the 40% mark where a target becomes a strong statement of conviction.
Slowing Engagement Has Dragged Netflix Toward Its 52-Week Low The core worry is engagement growth lagging rising content costs. View hours grew just 2% in the first half of 2026, while content expense is set to rise about 10% this year.
Q2 revenue of $12.56B missed expectations of $12.58B. EPS of $0.80 came in just above the $0.79 estimate. Free cash flow fell to $1.53B from $2.27B. In Q1, EPS of $1.23 missed the $1.34 estimate.
Shares are down 41.73% over the past year and 13.97% in the last month. The stock sits near its 52-week low of $65.08, far from the $124.86 high.
BMO’s $135 Case Rests on Ads, Mindshare and Live Events BMO’s first focus is ad-tier growth. Pitz expects the ad-supported tier to drive net additions while generating high-margin advertising revenue per user. Management says the pricing gap between the ad tier and the standard plan “is narrowing,” and expects ad revenue to roughly double to about $3B this year.
The second focus is mindshare. BMO’s survey shows roughly 75% US consumer penetration, with Netflix ranked as the most preferred streaming platform. The third focus is live content. Six of the top 10 new-member sign-up days over the past five years came from live events, though live programming accounts for only 1% of view hours.
Of 51 analysts, 7 rate Netflix Strong Buy, 28 Buy and 16 Hold, with zero Sells. The 2026 EPS estimate has slipped to $3.5836 from $3.5921 90 days ago.
Third-quarter guidance calls for revenue of $12.86B and EPS of $0.82. Netflix bought back $4.7B of stock in Q2 with $27.1B in authorization remaining.
Netflix Fell Much Harder Than Its Streaming Rivals Walt Disney (NYSE:DIS) trades at $105.47, down 6.63% year to date. Its average target of $126.61 implies 20.04% upside. Analysts are firmly bullish, with 6 Strong Buy, 24 Buy, 2 Hold and 1 Sell. Even so, Wall Street sees less upside in Disney than in Netflix.
Netflix Has Badly Lagged the S&P 500 This Year At $70.30, Netflix sits 32.19% below the $92.93 consensus target, based on coverage from 51 analysts. It also trades below both its 50-day moving average of $75.54 and its 200-day moving average of $84.58.
Netflix is down 25.02% year to date versus the S&P 500’s 12.08% gain. Over one year, Netflix has fallen 41.73% against the index’s 15.16% gain. At a forward P/E of about 19, the stock is priced for slower growth than its 13.4% revenue expansion suggests.
Ad Revenue Has to Carry the Netflix Rebound Netflix’s upside depends on advertising closing the pricing gap and the 2026 ad revenue target holding, coupled with steady pricing gains and cash flow recovery toward the roughly $12.5B full-year guide. Risks include flat engagement while content costs rise, the ad market softens, and estimates drift lower.
The consensus target is more credible than BMO’s $135.00 call. Third-quarter results will show which case the market prices.
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Akcie Netflixu letos klesly o 25 % kvůli slabší sledovanosti a silnější konkurenci, ale ve 2. čtvrtletí tržby vzrostly o 13,4 % na 12,6 miliardy USD a provozní marže byla 33,4 %.
There's no doubt about it. Netflix (NFLX +1.55%) is struggling. Shares of the leading streamer are down 25% this year on signs of weak engagement, rising competition from YouTube, and an underwhelming slate of original content.
As the chart below shows, Netflix's 25% slide includes a surge in late February when it bowed out of its pursuit of Warner Bros. Discovery, yielding to a higher offer from Paramount Skydance.
NFLX data by YCharts
Netflix even got a $2.8 billion breakup fee as part of WBD's decision to sell to Paramount instead, and the stock has still gotten crushed this year. Investors seem to think the company has lost its mojo and that the buzz is gone from its programming. Streaming is essentially turning into a commodity business, as they see it.
While plenty of investors have sold the stock this year due to those recent woes, I believe that's a mistake. Below, I'll explain why, and as a longtime Netflix shareholder, what it would take for me to sell my shares.
Image source: Getty Images.
Netflix is still a solid business Just from reading the bearish headlines, you might get the sense that Netflix is now in decline. However, that's far from the case. In its second quarter, revenue grew 13.4% to $12.6 billion, and its operating margin was 33.4%. While that was down slightly from the 34.1% clip from the quarter a year ago, it still shows Netflix is pocketing 1 out of every 3 dollars it receives before interest and taxes, a profit margin almost any company would be happy with.
That margin is a credit to the strength of the company's business model. It's scaled its subscription business to more than 300 million subscribers worldwide and now has a robust advertising business to go with it. Netflix's operating margin should continue to expand as it adds subscribers since the incremental costs to distribute content to new subscribers are basically nothing, though that subscriber pays the same as all the other ones.
Netflix's third-quarter guidance calls for 11.7% growth in revenue to $12.9 billion and an operating margin of 33.2%, showing the company is still on the right track.
About the weakness in engagement Netflix's hours watched rose 2% in the first half of 2026, which was an improvement from 1.5% growth in 2025. It's unclear if per-subscriber engagement is declining as the company no longer reports subscriber numbers. However, Wall Street analysts have predicted that per-subscriber engagement will fall in the second half of the year, meaning its customers are losing interest in the service.
While that's a troubling sign, it's worth remembering that engagement for a streaming service is variable, and that a couple of original hits and a stronger content slate may be all it needs to reaccelerate subscriber growth. In its most recent shareholder letter, Netflix acknowledged, "We know not all hours are equal," explaining that quality and variety are key components to engagement, in addition to quantity.
Netflix's efforts to add more live sports, for example, could do a lot to add and retain subscribers, even if it doesn't add up to that many hours.
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What would make me sell Netflix Excluding the breakup fee it got from Warner Bros. Discovery, Netflix trades at a price-to-earnings ratio of 26, about even with the S&P 500. That looks like a fair price to pay for a company growing its top line by double digits with superior profit margins.
For me to sell Netflix stock, its growth would have to slow meaningfully to mid-single-digits or below for several quarters. At this point, I believe the company is closer to an entertainment utility than a traditional consumer discretionary stock, and I think the business model can overcome even weak engagement. Netflix might not be Procter & Gamble, but even P&G is likely envious of Netflix's recurring revenue model, as its subscriptions help lock in customers.
Additionally, Netflix offers good value, and at-home entertainment tends to be recession-proof. I think it would take years of poor content choices to do lasting damage to the brand.
Overall, with its current growth rate and profit margin, Netflix looks closer to a buy than a sell at this price. The company has overcome plenty of obstacles before, and I expect to do the same with this one.
Deutsche Bank zvýšila doporučení pro Netflix na Buy, protože podle ní trh podceňuje silnější mezinárodní zapojení a globální růst. Cílovou cenu ale snížila na 95 USD z 100 USD.
Wall Street is split on Netflix after a brutal year for the stock, but Deutsche Bank just broke from the crowd with an upgrade built on a part of the business most investors are ignoring.
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Deutsche Bank upgraded Netflix (NASDAQ:NFLX | NFLX Price Prediction) to Buy from Hold. In the same note, it cut its price target to $95, down from $100. The firm says that the market’s “obsession” over U.S. time spent on Netflix overlooks the company’s larger total addressable market and “healthier” international engagement trends.
The upgrade suggests Wall Street is paying closer attention to Netflix’s global reach after a sharp sell-off.
Ticker Company Firm Action Old Rating New Rating Old Target New Target NFLX Netflix Deutsche Bank Upgrade Hold Buy $100 $95 Deutsche Bank’s Case Rests on Overseas Viewing According to the research note, Netflix’s international time spent has increased year-over-year in each of the past four six-month periods. Deutsche believes this year’s weakness in U.S. time spent “could simply be driven by less creative success,” a problem the next round of hits could fix.
The firm also says Netflix has an “established competitive advantage and substantial lead” over competitors in international production. It adds that the stock’s valuation now offers an attractive entry point.
Company data backs up that view. Non-English content drives more than a third of all viewing. View hours grew 2% in H1 2026 vs. 1.5% in 2025, even with competition from the Winter Olympics and World Cup.
Company Snapshot: Double-Digit Growth in Every Region Second-quarter revenue rose 13.4% YoY to $12.56B, just short of the $12.58B estimate. EPS of $0.80 beat expectations of $0.79, and operating margin reached 33.4%. Latin America grew 21%, Asia Pacific 16%, EMEA 14% and North America 10%.
Management said Netflix is “under 45% penetrated into addressable households around the world,” out of roughly 800 million such households. Full-year revenue guidance stands at $51B to $51.4B, and advertising revenue is expected to roughly double to about $3B.
Why the Move Matters Now With Shares Down Sharply in 2026 Netflix stock trades at $70.49. It is down 24.82% year to date and 41.77% over the past year. Its 52-week range runs from $65.08 to $124.86, and it trades at about 19x forward earnings.
The timing is notable. On the same day, Bloomberg reported that analysts are souring on the stock as growth fears mount, which puts Deutsche on the opposite side of that trend.
The overall consensus still tends positive, with 7 Strong Buy, 28 Buy and 16 Hold ratings, no Sell ratings and an average target of $92.93. Buybacks add support: Netflix bought back $4.7B of stock in Q2 and has $27.1B remaining under its authorizations.
What It Means for Your Portfolio Retirement-focused investors should consider the international growth story against some real risks. Free cash flow fell to $1.53B from $2.27B a year earlier, largely because of higher cash taxes. In addition, $1 billion of debt matures later in 2026. Over the past 30 days, analysts made 3 up and 4 down revisions to 2027 EPS estimates.
The next test is the third-quarter earnings report. Management guided for revenue of $12.86B and EPS of $0.82. Watch whether international engagement keeps growing and whether U.S. viewing steadies. The revised outlook deserves a closer look from long-term investors, even though near-term volatility remains a real risk.
Contact [email protected] for any questions or corrections.
2026 is nearly at the three-quarter mark, and Netflix (NFLX -0.80%) is on track for only its second losing year in the last decade.
The stock tumbled in 2022 in the post-pandemic reopening as consumer habits shifted away from at-home activities like streaming. With the stock down 23% year-to-date, Netflix could have its first losing year in an up year for the S&P 500 since 2014.
While the streamer has continued to deliver solid growth, the stock has been victimized by slowing engagement, the lack of a big hit, a rising threat from YouTube, and a lofty valuation heading into the year.
To add insult to injury, Wells Fargo last week became the first major sell-side firm to downgrade Netflix to a sell-equivalent, rating it underweight and lowering its price target to $57 from $80. This week, HSBC followed that up by cutting its rating to hold and lowering its price target from $96 to $76.
Image source: Netflix.
Why Wall Street is souring on NetflixWells Fargo pointed to a concerning engagement trend, estimating hours per subscriber in the second half of the year were set to fall 4%, and for the Top 100 Netflix Originals, it now sees a 21% decline in viewing hours. If that's true, it's a clear sign that Netflix's economic moat is diminishing, as streamers primarily compete on original content, and just one hit show can drive millions of sign-ups and help lower churn.
HSBC, meanwhile, said YouTube is gaining market share from Netflix and noted the disappointing performance of Netflix Originals.
Finally, the prediction market Kalshi is forecasting that Netflix app downloads will fall 37% in September from a year ago, signaling a drastic decline in new users.
The YouTube rivalry is heating upLongtime Netflix CEO Reed Hastings consistently said YouTube was the company's biggest competitor rather than another streamer or cable TV, and that statement has become truer over the years. Both companies are becoming more like the other one.
YouTube launched a "Shows" feature similar to Netflix's brand of serialized television, while Netflix is rolling out short- and medium-length videos in the style of YouTube. It's also been poaching top YouTube talent, and YouTube is fighting back by offering millions to top creators to be exclusive to the platform.
YouTube now leads streaming video time in the U.S. with a 14.2% share, according to Nielsen, up 80 basis points from a year ago, while Netflix is bringing up second place with just 7.8%, down 100 basis points, showing Netflix is losing significant market share.
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Is this just a trend?Netflix has been through plenty of peaks and valleys over its history, and the streamer has a strong track record of coming out on top.
Slowing growth due to a weak content slate is a disappointment, but it's not out of the ordinary for Hollywood. Movies and TV shows turn out to be busts all the time, and studios go through cycles of hits and misses.
Netflix should eventually find more hits, and there's no clear sign that its production flywheel is broken. Meanwhile, the company is making a smart move with its expansion into sports, and the advertising tier has been a winner.
Netflix will have to return to engagement growth in order for the stock to recover, and that might take time. However, the company is still delivering double-digit growth with strong operating margins. Investors are right to be disappointed with this year's slide, but there's no reason to be alarmed. One bad year does not make for a broken stock, especially in the entertainment industry.
Netflix (NFLX +0.50%) is still growing at a double-digit rate. It just isn't growing like it was a year ago.
The streaming service company's revenue rose 16.2% year over year in the first quarter of 2026 and 13.4% in the second, down from 17.6% growth in the fourth quarter of 2025. And management's forecast calls for about 12% growth in the third quarter.
At about $72 as of this writing, the stock sits more than 40% below its 52-week high and about 10% above its 52-week low.
Is a stock with a shrinking growth rate worth buying anyway? That depends on what's doing the shrinking -- and on how much of the slowdown is already priced in.
Image source: Netflix.
Growth peaked late last yearThe slowdown follows an unusually strong run. Netflix's growth rate climbed all through 2025, going from 12.5% in the first quarter to 15.9%, 17.2%, and finally 17.6% in the fourth quarter, according to the company's shareholder letters. The first two quarters of 2026 have given back part of that climb.
Currency isn't hiding anything, either. Excluding foreign exchange, the first quarter's growth was 14%, the second's was 12%, and management's third-quarter forecast works out to 11% on that basis. The slide shows up on both measures.
Worth noting: the third quarter's 12% is still a forecast, not a reported result. Netflix has reported two quarters of slowing growth, and management expects a third.
Cooling demand or tough comparisons?Slowing demand would be a business problem. Tough comparisons, on the other hand, can fade on their own as the year-ago numbers reset.
The evidence, I think, points mostly to the second. Growth in 2025 was driven by membership gains, price increases, and a fast-scaling advertising business. Each quarter of 2026 has to top a bigger number than the one before it, so even steady demand can produce a smaller growth rate.
And the demand signals in the company's own numbers look healthy. Members watched more than 97 billion hours of programming in the first half of the year, and viewing grew 2% year over year -- slightly faster than the 1.5% growth Netflix saw in 2025, despite competition from the Winter Olympics and the World Cup. Revenue grew by double digits in every region in the second quarter. Management said its first-half price increases have performed in line with past changes and its expectations. And advertising revenue remains on track to about double this year, to about $3 billion.
Profits, meanwhile, have kept growing through the slowdown. Second-quarter operating income rose 11% year over year, to $4.2 billion. Management still expects an operating margin of 31.5% for 2026, up from 29.5% in 2025, a forecast the company says implies operating income growth of more than 20% this year.
Growth is supposed to level off near 12%Netflix narrowed its 2026 revenue forecast in July to a range of $51.0 billion to $51.4 billion (13% to 14% growth) rather than cutting it. Run the numbers on what that leaves for the fourth quarter, and it comes to about $13.3 billion to $13.7 billion, or growth of about 11% to 14% over the year-ago period.
In other words, the company's own guidance describes a growth rate leveling off around 12%, not one that keeps falling.
The stock's slide has reset the valuation, too. At about $72 per share, the stock costs about 19 times what analysts expect Netflix to earn next year. At its 52-week high, the same estimate would have put the price-to-earnings multiple in the low 30s.
Sure, 19 times earnings isn't a demanding price for a business guiding to 13% to 14% revenue growth with a rising operating margin. But it isn't an obvious bargain, either. It looks arguably fair if growth settles near 12% -- and it could get expensive in hindsight if the rate keeps sliding into 2027 instead.
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So, should you buy Netflix stock anyway? Not yet, in my view. The price already seems to assume the growth rate levels off the way the guidance implies. However, a forecast isn't the same thing as a reported quarter, and the reported numbers are still headed the wrong way.
For investors who already own the stock, though, I don't see much in this slowdown worth acting on. It has followed the path management laid out, and profits have grown right through it.
Of course, the fourth quarter may still miss that range. But I'd treat Netflix as a hold today, and I'd revisit buying once a reported quarter shows the growth rate holding.
A seasoned investor who dodged a brutal Netflix slide by exiting in June just bought back in, and his reasoning cuts against everything the bears are saying right now.
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Steve Weiss, founder and managing partner of Short Hills Capital Partners, told viewers of CNBC’s Halftime Report on September 23, 2026 that he had added to his position in Netflix (NASDAQ:NFLX | NFLX Price Prediction) after a Wells Fargo downgrade to sell pushed the stock lower. The trade is notable because Weiss had exited the name in June and watched it fall 17% without him before deciding the bad news was priced in.
What sharpens the trade: Weiss is stepping back in while cautioning, “I’m not feeling particularly good about any of the streamers.” He framed the buy as a tactical trade against extreme negativity in the sector.
A Painful Year for Netflix Holders Netflix trades near $71.49, down 41.75% over the past year from $122.74, and off 23.89% year to date. The five-year return tells a starker story: NFLX is up just 20.3% since September 2021, while the SPDR S&P 500 ETF (NYSEARCA:SPY) has returned 73.41% over the same span.
Weiss’s June exit looks well timed in hindsight. NFLX closed at $85.85 on June 1 and has slid 15.95% since, including an 8.23% drop in the past week alone after the Wells Fargo call.
Analyst Split: Wells Fargo vs. the Bulls The bearish case landed hard. Wells Fargo cut Netflix to a sell with a $57 price target amid softening engagement, which would imply more than 25% additional downside. The Barron’s take on the downgrade argued Netflix is losing the streaming wars to Disney. On CNBC’s Halftime, Josh Brown called Netflix his biggest mistake of 2026, citing YouTube’s growing TV viewership and a long stretch without an original show that people are talking about when they turn the TV off.
The bullish counter came from BMO, with an outperform rating and a $135 target. Consensus sits in between, with an Alpha Vantage-aggregated analyst target price of $92.93 and 28 buy and 7 strong buy ratings against 16 holds and zero sells.
Bull Case Weiss Is Renting Weiss cited 330 million subscribers, margin strength, accelerating ad growth, and improved cash generation as reasons the bad news was already reflected in the share price. Netflix’s own numbers support the operating story. Q2 2026 revenue rose 13.4% year over year to $12.56 billion, operating margin hit 33.4%, and management guided full-year 13% to 14% top-line growth with advertising revenue expected to roughly double to about $3 billion in 2026. The company repurchased $4.7 billion of shares in Q2, its largest buyback quarter ever, with $27.1B of capacity left in its war chest, per the Q2 8-K shareholder letter.
Valuation has compressed alongside the price. Forward P/E now sits at 19, versus a trailing P/E of 23.
Bear Case Weiss Won’t Argue With Weiss’s structural worry is margins. Live sports and premium entertainment are expensive to acquire and deliver. He pointed to Disney’s 13% price bump to Disney+ as evidence of the pricing defense every streamer is being forced into. Netflix’s own plan is to grow content spend about 10% in 2026, and live programming will consume 5% of the content budget while producing 1% of view hours. Management argues those hours punch above their weight on acquisition and advertising, but they are undeniably premium-cost hours.
What to Watch Next The next binary event is close. Netflix reports Q3 2026 results after the close on October 20, 2026. Management has guided Q3 revenue of $12.86 billion, operating margin of 33.2%, and diluted EPS of $0.82. With the shares sitting well below their $85.30 200-day moving average, any deviation from that guide, in either direction, will likely settle the bull-bear standoff Weiss is trading around.
Contact [email protected] for any questions or corrections.
Bývalý manažer hedge fondu Whitney Tilson řekl, že Netflix je „vysoko na seznamu“ akcií, které zvažuje, po snížení doporučení od Wells Fargo. Akcie jsou letos o 21 % níže.
Netflix Inc (NASDAQ:NFLX) stock trades near two-year lows with questions on spending and a weak content lineup for the second half of 2026. The stock declines have attracted attention from a former hedge fund manager.
• Netflix shares are experiencing downward pressure. Why is NFLX stock trading lower?
Former hedge fund manager Whitney Tilson told investors that Netflix stock is "high on the list" of stocks being considered by him and his Stansberry Research team.
Tilson credits a recent analyst downgrade and a new show on Netflix as reasons why he’s becoming more interested in the streaming stock.
"It dropped 4.7% on Friday to close at $71.79 after Wells Fargo analyst Steven Cahall downgraded the stock from Equal Weight to Underweight," Tilson said in a daily newsletter.
Tilson said the analyst showed concern about viewer engagement and a weak slate of original content for the second half of 2026, two items that could lead to subscribers canceling their Netflix plans.
While each Netflix subscriber will have a different opinion on the content lineup, Tilson shared that he and his wife recently finished watching the fifth season of "Fauda," an Israeli political thriller. Tilson said the show has found strong viewership in some Arab countries, including hitting number one in Lebanon.
"So, my experience and observation of Netflix is inconsistent with Cahall’s concerns."
The former hedge fund manager also highlighted that Bill Ackman and Pershing Square recently bought Netflix stock, believing the streaming company is undervalued and the company has won the streaming wars.
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Netflix Stock ValuationTilson said he pitched the stock at the Value Investing Seminar in Italy back on July 10, when shares traded at $73.37.
"[This] is an A+ financial picture: Netflix continues to grow rapidly, [free cash flow] is soaring, and its balance sheet is strong," Tilson said of Netflix’s financials in July.
Netflix stock saw a short run into the low $80s after those July comments before falling near two-year lows. Tilson said the stock was overvalued when it peaked 13 months ago and traded for more than 50 times forward earnings.
"But with the stock down and earnings up, it now trades at only 21.1 times this year’s consensus analysts’ estimates and 18.8 times next year’s."
Tilson said these are "below-market multiples" for a company like Netflix that is "far-above-market-quality."
Netflix will report third-quarter financial results on Oct. 20.
Netflix Stock Price ActionNetflix stock is down 0.05% to $71.83 on Tuesday versus a 52-week trading range of $65.10 to $124.86. Netflix stock is down 21% year-to-date in 2026.
Netflix podle analytiků už započítává veškeré špatné zprávy, i když akcie za 12 měsíců klesly o 40,23 %. Evercore zvýšila cílovou cenu na 110 USD a čeká růst díky reklamnímu předplatnému a živému vysílání.
Netflix Inc. (NASDAQ:NFLX) stock traded higher Tuesday in premarket trading as U.S. stock futures remained steady. Nasdaq futures rose 0.12%, while S&P 500 futures gained 0.05%.
The stock remains below several key moving averages after a difficult year. Weaker engagement, a lack of breakout hits and growing competition from short-form video have weighed on investor sentiment.
Still, analysts at Evercore ISI and Piper Sandler see several ways Netflix could revive growth.
The shares have fallen 40.23% over the past 12 months. That weakness follows a period in which investors questioned both Netflix’s valuation and its ability to sustain engagement.
Evercore ISI analyst Mark Mahaney said Friday that Netflix entered the year trading at roughly 35 to 40 times earnings, leaving little room for disappointment.
Speaking on CNBC, Mahaney said uncertainty around Netflix’s attempted Warner Bros. deal also hurt sentiment. Investors questioned whether the strategy was offensive or defensive.
At the same time, engagement weakened as Netflix failed to produce enough major breakout hits. Mahaney also pointed to growing competition from YouTube, TikTok and other short-form platforms.
Analysts See Paths To Renewed GrowthDespite those concerns, Mahaney remains bullish. Evercore raised its Netflix price target to $110 from $100.
He said Netflix could benefit from expanding its lower-cost, ad-supported offering into 15 additional international markets. He also expects live programming to attract new subscribers and support engagement.
Mahaney cited Netflix’s exclusive World Baseball Classic streaming rights in Japan as one example. He also highlighted the Women’s World Cup, which Netflix is set to stream exclusively in North America next year.
Piper Sandler analyst Tom Champion also sees room for Netflix to adapt.
Champion said Netflix has already successfully reshaped its business through its password-sharing crackdown and growing advertising operation.
The next opportunity could come from mobile-first content, he said in a CNBC appearance.
Champion pointed to “micro-dramas,” or short, vertically formatted programs designed for smartphone viewing. Such content could help Netflix compete for consumer attention outside the living room.
With Netflix shares under pressure, Champion said the stock already reflects significant pessimism. “There is a heck of a lot of bad news priced in,” he said. The key question is whether Netflix can adapt its content strategy again and improve engagement.
Technical AnalysisNetflix is trading 13.4% below its 200-day simple moving average of $85.30. It is also 6.1% below its 20-day SMA of $78.60 and 2.5% below its 50-day SMA of $75.72.
That setup leaves several potential resistance levels above the current price.
The 20-day SMA remains above the 50-day SMA, offering a more constructive short-term signal. However, the 50-day SMA is still below the 200-day SMA.
That reflects the “death cross” formed in December 2025 and points to continued weakness in the longer-term trend.
Momentum also remains soft. Netflix’s MACD is below its signal line, while the histogram is negative. That suggests buying momentum has weakened.
Key resistance: $82.50, a potential hurdle above the current trading range. Key support: $71, followed by the 52-week low of $65.08. Analyst OutlookNetflix carries a consensus Buy rating and an average price forecast of $90.05.
Wells Fargo downgraded Netflix to Underweight on Sept. 18 and lowered its price forecast to $57. Evercore ISI maintained an Outperform rating and raised its forecast to $110 from $100. Wolfe Research also maintained an Outperform rating and raised its forecast to $95 on Aug. 25.
The stock trades at about 23.1 times earnings.
Benzinga Edge RankingsNetflix scores strongly on quality and growth but remains weak on momentum and value.
Its Benzinga Edge scores are 89.63 for quality and 82.36 for growth. Momentum stands at 8.1, while value comes in at 18.61.
The readings highlight the contrast between Netflix’s business fundamentals and its weaker stock-price trend.
From a technical perspective, a move back above the $75 to $79 area could improve the short-term setup. A break below $71 would put the 52-week low back in focus.
Top ETF ExposureNetflix is a major holding in several exchange-traded funds.
The REX FANG & Innovation Equity Premium Income ETF (NASDAQ:FEPI) has a 6.84% weighting in the stock. The Amplify AI Powered Equity ETF (NYSE:AIEQ) carries a 5.48% weighting, while the Global X PureCap MSCI Communication Services ETF (NYSE:GXPC) has a 4.92% weighting.
Large fund flows into or out of these ETFs can contribute to trading activity in Netflix shares.
Price ActionNetflix shares rose 0.66% to $73.84 in Tuesday premarket trading, according to Benzinga Pro data.
Bill Ackman prostřednictvím Pershing Square znovu vsadil na Netflix, když ve druhém čtvrtletí přiznal pozici za zhruba 1 miliardu USD, tedy asi 5 % portfolia. Předchozí sázka skončila v roce 2022 ztrátou 400 milionů USD.
Bill Ackman lost $400 million the last time he bought Netflix and bailed within three months. Now Pershing Square just disclosed a $1 billion position, and the reasons he walked away in 2022 look nothing like the streaming landscape he…
Bill Ackman is betting on Netflix (NASDAQ:NFLX | NFLX Price Prediction) again. Pershing Square’s second-quarter filing revealed a Netflix position worth roughly $1 billion, about 5% of the portfolio, alongside new stakes in payment networks and a full exit from its Google-parent holding.
The prior attempt ended badly. Ackman bought Netflix in 2022 after a subscriber-growth panic, then dumped the entire position within about three months, absorbing a reported $400 million loss. He conceded at the time that Pershing had “lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty.”
He is buying into weakness again. Netflix closed at $71.79 on September 18, down 40.56% over the past year and 23.43% year to date.
What Actually Changed Since 2022 Netflix has “effectively won the streaming wars”, with a subscriber base that “exceeds any competitors by a wide margin”.
Netflix passed 325 million paid subscribers in 2025 and generated $9.46 billion of free cash flow, up 36.68% year over year.
Walt Disney (NYSE:DIS) is still stitching Disney+, Hulu and ESPN into a bundle capable of Netflix-caliber margins, and Warner Bros. Discovery (NASDAQ:WBD) is the counterfactual: Netflix walked away from acquiring it and collected a $2.80 billion termination fee instead.
Advertising is the mechanism behind the thesis. Netflix guided ad revenue to $3 billion in 2026, roughly doubling from over $1.5 billion in 2025.
The ad tier drove more than 60% of Q1 sign-ups in ad markets, with advertiser count up 70% year over year to more than 4,000 clients.
Co-CEO Greg Peters called the gap between ad-tier and standard-plan revenue per member “near-term under-realized revenue growth,” signaling pricing power ahead.
Why the Bear Case Still Holds Up Growth is decelerating into guidance. CFO Spence Neumann framed 2026 as “13% to 14% top line growth for the full year” and “about $6 billion of incremental revenue year over year”.
Viewing hours grew only 2% in the first half of 2026, and Wells Fargo’s Steven Cahall has an Underweight rating, citing softer engagement.
Valuation is no longer a bargain either, with a trailing P/E of 23x against an analyst target of $93.37.
Bull and Bear Case for NFLX Stock The bull case is that Ackman is buying a scaled monopoly at a discount. Netflix returned $4.7 billion in Q2 buybacks with $27.1 billion remaining, and management sees Netflix capturing only 7% of the addressable revenue market.
The bear case is that engagement is stalling while content spend rises approximately 10% in 2026, and the failed Warner Bros. Discovery deal signals management is hunting for growth it cannot manufacture organically.
The deciding variable is the ad tier. If the $3 billion target lands and average revenue per member converges toward the standard plan, Ackman’s bet works. If not, the 2022 loss repeats.
Contact [email protected] for any questions or corrections.
Netflix ve 2. čtvrtletí odkoupil akcie za rekordních 4,7 miliardy USD a stále mu zbývá 27,1 miliardy USD na zpětné odkupy akcií. To odpovídá zhruba 8 % firmy.
Netflix (NFLX -4.67%) just bought back its own stock like never before. The streaming giant repurchased a record $4.7 billion of shares in the second quarter, and it closed the quarter with $27.1 billion left on its buyback authorizations.
That's a big figure, even for Netflix. At about $76 per share as of this writing, the company's market cap is about $326 billion. Put another way, the unused authorization is enough to retire about 8% of the whole company at today's price.
But a big buyback headline and a good result for shareholders are not the same thing. What matters is how quickly the share count is shrinking, how long the pace can continue, and what shareholders get out of it.
Image source: Netflix.
The Warner Bros. breakup helped pay for itThe authorization took shape quickly, and a deal that did not happen is a big piece of the story. Netflix had been trying to acquire Warner Bros., but it chose not to increase its offer, and the deal fell through early this year. The breakup came with a $2.8 billion termination fee received by Netflix -- money that drove management's 2026 free cash flow forecast up to about $12.5 billion, from a prior $11 billion.
Netflix had suspended its buyback during the pursuit, and it resumed in the first quarter, spending $1.3 billion and leaving $6.8 billion on its authorization. In April, the board added another $25 billion to a repurchase program that doesn't have an expiration date. The company put the new room to work immediately. It spent $4.7 billion on its own shares in the second quarter, more than triple the previous quarter's outlay and its biggest quarter of repurchases to date.
Also worth mentioning: Netflix paid an average of about $88 per share for that stock. With the stock around $76 today, the same money retires more shares than it did a few months ago.
Can Netflix keep buying at this pace?Not at the second quarter's rate. Netflix brought in $1.5 billion of free cash flow (the cash its operations produce minus equipment purchases) during the quarter, down from $2.3 billion a year earlier. The drop included larger cash tax payments linked partly to that termination fee. So the quarter's buying was about three times the cash the business produced during it, with the difference coming out of the additional cash the Warner Bros. episode left behind.
The record quarter, in my view, says more about that one-time fee than about a new normal.
Management forecasts about $12.5 billion of free cash flow for the full year. By comparison, the $27.1 billion in authorizations amounts to a little more than two years of the cash Netflix produces after paying for all its content.
In the end, the authorization is less a promise of more record quarters than a long runway of consistent buying.
The buying is showing up in the share count. Netflix averaged about 4.26 billion fully diluted shares in the second quarter, down from 4.35 billion a year before, a drop of about 2%.
Two percent might not seem like much. But a share count shrinking at that rate contributes about two points to per-share growth every year on top of whatever the business itself generates.
And if Netflix spends the entire $27.1 billion anywhere near today's price, the effect grows. About 8% fewer shares would mean about 9% higher earnings per share on the same profits.
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The second quarter showed the effect. Net income climbed about 9% year over year, while earnings per share rose 11%. The buyback explains the difference.
Is a $27 billion buyback authorization a reason to buy the stock, then? Not by itself. A buyback, of course, magnifies per-share results. It does not change the direction of the business.
And the direction is what concerns me. Netflix's revenue growth was 16% in the first quarter and 13% in the second, a slowdown that arguably matters more than any repurchase program -- and growth might cool a bit more from here. At about 20 times next year's expected earnings, the stock is priced for that growth rate to level off -- something the buyback has no bearing on.
I'm pleased to see Netflix returning cash at prices well under what it paid a few months ago. But I don't buy a stock for its buyback, and I'm not buying this one today.
Wells Fargo snížila hodnocení Netflixu na Underweight z Equal Weight a cílovou cenu na 57 USD z 80 USD kvůli slábnoucí angažovanosti diváků. Akcie v pátek ráno klesly o 4 %.
Wells Fargo just handed Netflix one of the street's most bearish ratings while a rival analyst pushed a price target nearly double that level, leaving investors to figure out which firm is reading the audience right before earnings arrive.
Netflix (NASDAQ:NFLX | NFLX Price Prediction) stock is falling in Friday morning trading after Wells Fargo cut its rating and slashed its price target on the streaming leader. Shares are down 4% to $72.08, extending a punishing stretch that leaves the name deep in the red for the year.
The Communication Services Select Sector SPDR ETF (NYSEARCA:XLC) is up 0.26% this morning. Meanwhile, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.3%. That split makes today’s Netflix drop read as a stock-specific repricing rather than a sector or broad tape event.
Walt Disney (NYSE:DIS) stock is at $105.31, basically unchanged. Disney’s flat tape reinforces that the selling is contained to Netflix rather than spreading across the streaming complex, even with the two names sitting inside the same sector fund.
Wells Fargo Cuts Netflix to Underweight Wells Fargo analyst Steven Cahall downgraded Netflix to Underweight from Equal Weight and lowered his price target on the stock to $57 from $80. Cahall’s stated concern is softening viewer engagement at Netflix and a weaker slate of original series in the second half of the year, with subscriber churn risk rising into next year.
Cahall also allowed that he could be wrong, pointing to Netflix’s record content spending and its history of delivering unexpected hits. That kind of caveat isn’t unusual on a bearish call for a name with this much operating leverage and this much content in the pipeline. It also frames the downgrade as a debate over the second-half slate rather than a call against the Netflix business model.
Netflix stock is down 22% year to date (YTD), so the downgrade lands on a chart that has already priced in a lot of sentiment damage. The company said this week that it will report Q3 2026 numbers in the coming earnings cycle, which puts the timing of the Wells Fargo cut squarely ahead of a fresh operating update from Netflix.
A Split Verdict From the Sell Side Evercore ISI analyst Kutgun Maral went the other way earlier this week, raising his Netflix price target to $110 and keeping an Outperform rating. Maral’s survey work showed Netflix household penetration at a multi-year high in the United States and at a record level in Japan, helped by a sharp rise in live sports viewing among members.
The two firms are pricing the same asset off different measures of the Netflix audience. Wells Fargo is weighing hours watched per Netflix subscriber and reads that trend as deteriorating into next year. Evercore ISI is weighing households signed up to Netflix and reads that trend as strengthening, particularly in international markets where live sports has become a bigger draw.
What divides the two calls is which measure of the Netflix audience matters more, hours per subscriber or households on the service. Netflix’s 22% YTD slide is the market’s evidence that the engagement case has had the upper hand for most of the year, even as the household case keeps drawing bullish notes.
Streaming Peers and Broader Sector Read Netflix’s slide isn’t pulling the rest of the streaming complex down with it. Warner Bros. Discovery (NASDAQ:WBD) is a direct rival for content licensing and live sports rights, and its shares aren’t following Netflix lower this morning. Spotify is another large subscription-media operator competing for consumer wallet share and listening time, and it too is trading independently of the Netflix move.
That contained peer reaction supports the read that today’s Netflix decline is analyst-driven rather than sector-wide. Disney’s near-flat tape and the communication services fund’s 0.26% gain say the same thing from a top-down view, even as the broad market slips.
What to Watch Traders may want to keep an eye on whether Wells Fargo’s $57 target on Netflix attracts follow-on cuts from other desks or draws public pushback from bulls echoing Evercore ISI’s $110 call. The gap between those two numbers is the debate on Netflix in a single line, and the next batch of engagement data can do a lot to settle which framework is right.
Investors sizing their exposure to Netflix should consider that this NFLX stock has already absorbed a 22% YTD hit against a downgrade thesis built on next year’s slate risk and second-half engagement. A cautious position makes sense in their book while the sell side sorts out whose read on the Netflix audience carries more weight into the Q3 report.
Contact [email protected] for any questions or corrections.
Bill Ackman letos znovu koupil Netflix za zhruba 1,25 miliardy USD po dřívější ztrátové sázce. Tentokrát věří hlavně reklamnímu byznysu a zpětným odkupům akcií.
Back in early 2022, Bill Ackman plowed about $1.25 billion worth of Pershing Square's (PS -1.49%) capital into Netflix (NFLX -1.30%). In his letter to shareholders, he expressed confidence in the competitive advantages of the streaming video leader and its ability to translate that into strong earnings growth. Just a few weeks later, however, he sold the position entirely, taking a significant loss on the investment.
Ackman never stopped following the company, though. Earlier this year, he bought a new position in Netflix worth about $1 billion. Here's what pushed Ackman out of the stock the first time and why he thinks it's worth buying now.
Bill Ackman. Image source: Getty Images.
A big strategy change pushed Ackman out of Netflix When Ackman bought Netflix in early 2022, slower-than-anticipated subscriber growth had recently led to a steep sell-off in the stock. But Ackman saw Netflix's long-term potential to reach a massive audience, and viewed its recent performance issues as merely a hiccup.
Netflix's scale enables it to invest vast sums in content while keeping its per-subscriber costs low. It had also demonstrated its ability to serve a global audience, taking local-language content from international markets -- like South Korea's Squid Game -- and turning it into global hits.
But when the company reported its first-quarter earnings that year, not only did it disappoint investors once again, but it also shared a big strategic change. It planned to start developing an ad-supported tier with a lower monthly subscription price. Ackman loved the simplicity of Netflix's subscription-only model. Introducing advertising into the mix made the business more difficult to predict.
"We require a high degree of predictability in the businesses in which we invest due to the highly concentrated nature of our portfolio. While Netflix's business is fundamentally simple to understand, in light of recent events, we have lost confidence in our ability to predict the company's future prospects with a sufficient degree of certainty," he wrote to investors announcing Pershing Square's Netflix sale.
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More than four years on, Ackman's original bull thesis has come to fruition.
"Netflix has since effectively won the streaming wars," he wrote in his letter to shareholders in August. Its scale vastly exceeds that of its closest competitors, and its push into advertising has enabled it to expand into live programming. That's been a key driver of new subscriptions.
Meanwhile, Netflix was just starting to show positive free cash flow in 2021, and Ackman expected management to grow free cash flow and use excess capital to buy back shares. Indeed, management has executed exactly that, and free cash flow has ballooned to approximately 90% of earnings.
Ackman's expectations for Netflix today aren't quite as high as they were in early 2022, when he expected earnings per share to compound at more than 20% annually for the foreseeable future. That turned out to be an accurate assessment: Earnings per share have compounded by 27% since the end of the first quarter that year.
But with steady margin expansion and consistent share repurchases, he believes Netflix can come close to that 20% annualized EPS growth. After the stock's valuation sank back to levels last seen in 2022, Ackman took the opportunity to buy shares again, this time with greater confidence in the advertising business.
Netflix oznámil ve 2. čtvrtletí tržby 12,56 miliardy USD, meziročně o 13,37 % více, a zdvojnásobuje reklamní byznys na zhruba 3 miliardy USD. Společnost zároveň schválila další zpětný odkup akcií za 25 miliard USD.
Netflix shares have shed more than a third of their value over the past year, yet the company's ad business is exploding and buybacks are hitting record pace. Our proprietary model sees a stark disconnect between where the stock trades…
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Netflix (NASDAQ:NFLX | NFLX Price Prediction) has spent the last year giving back gains from its 2025 highs, but our proprietary model sees the setup as a rare mispricing in a mega-cap growth name.
With the stock trading at $77.90 after a 35.21% one-year decline, the doubling of the ad business, a record buyback pace, and stubborn subscription pricing power all argue the shares are pricing in far too much caution.
Metric Value Current Price $77.90 24/7 Wall St. Price Target $154.27 Upside 98.04% Recommendation BUY Confidence Level 90% Our 24/7 Wall St. price target for Netflix is $154.27 over the next 12 months, implying 98% upside from here. That is one of the widest gaps we carry on a mega-cap, and our confidence is high.
Ad Doubling and a Record Buyback Reset the Story Netflix shares are down 16.92% year-to-date and off 25% from a 52-week high of $124.86, yet the operating story keeps improving.
Q2 2026 revenue rose 13.37% to $12.56 billion with operating margin at 33.4%, and EPS of $0.80 beat consensus. Management guided full-year revenue to $51 to $51.4 billion, with ad revenue set to roughly double to $3 billion and free cash flow near $12.5 billion.
The board also authorized an incremental $25 billion in buybacks on top of remaining capacity, and Q2 repurchases of $4.7 billion were the largest quarter in company history. Netflix ultimately walked away from the pursuit of Warner Bros. Discovery (NASDAQ:WBD) and pocketed a $2.8 billion termination fee, refocusing capital on organic growth.
Why Bulls See a Breakout to $167 The bull case is straightforward. Management describes an addressable base of roughly 800 million households and just 7% of addressable revenue captured.
Doubling ads to $3 billion, live-sports rights that drove six of the top 10 sign-up days over the past five years, and GenAI in roughly 300 titles all support double-digit revenue and 20%+ operating income growth.
Our bull scenario puts the shares at $167.56 a year out. Analysts already lean heavily positive with 7 Strong Buys, 29 Buys, and 15 Holds.
What Could Go Wrong The risks are real. Free cash flow fell 32.73% year over year in Q2 on higher cash taxes, content amortization is front-loaded in H1, and $1 billion in debt matures later in 2026.
Bulls would counter that the cash flow decline is a timing item and that content amortization growth of 10% still trails revenue growth. Our bear scenario at $125.56 assumes sports rights inflation and FX pressure erode margin, but even that outcome sits 61% above the current price.
How Netflix Compares to Disney, Spotify, and Warner Bros. Discovery Disney (NYSE:DIS) is the closest scaled peer with combined Disney+/Hulu SVOD posting 15% subscription revenue growth last quarter, yet trades at a P/E of 15, roughly half of Netflix at 30. Disney’s operating margin of 15% also trails Netflix’s 29.49%, which supports Netflix’s premium multiple.
Spotify (NYSE:SPOT) offers the growth-multiple contrast, carrying a P/E near 52 on 777 million MAUs and 13.9% Q2 revenue growth. If Spotify commands that multiple on similar top-line, Netflix at 30x, with far higher margins and buyback firepower, looks conservatively valued and makes our $154 target defensible.
Warner Bros. Discovery is the M&A reference point. Its Streaming Adjusted EBITDA jumped 63% ex-FX in Q2, but the pending Paramount Skydance merger and 3.4x net leverage highlight why Netflix’s decision to keep its balance sheet clean matters.
Company P/E Operating Margin Netflix 30 29.49% Disney 15 14.65% Spotify 52 12.79% Setup Looks Compelling at $77.90 The setup looks attractive at $77.90 as long as Q3 revenue comes in near the $12.86 billion guide and ad revenue tracks toward $3 billion.
The thesis weakens if operating margin slips below 30% or if sports rights bidding pushes content amortization above revenue growth. With the 24/7 Wall St. price target at $154.27, a buy recommendation, and 90% confidence, the risk-reward tilts firmly bullish.
Looking further out, here is where our model projects Netflix could trade, assuming current growth and margin trajectories hold.
Year 24/7 Wall St. Price Target 2026 $92 2027 $170 2028 $264 2029 $366 2030 $443 These projections assume Netflix continues executing on ad-tier growth, disciplined content spend, and aggressive buybacks. A sharp step-up in live-sports rights spending or a global consumer downturn are the clearest paths to downside.
Contact [email protected] for any questions or corrections.
Netflix v pondělí vzrostl asi o 4 % (3,77 %), zatímco akcie spojené s AI se prodávaly. Investoři ocenili, že jeho kapitál jde hlavně do obsahu, ne do AI infrastruktury.
Stocks tied to the artificial intelligence (AI) build-out sold off Monday morning. The selling followed a weekend essay from Anthropic CEO Dario Amodei calling for the industry to slow the pace at which it develops more capable AI models -- an idea that OpenAI CEO Sam Altman backed.
Memory specialist Micron Technology fell about 5%, chip designer Arm Holdings dropped about 9%, and Nvidia slid about 3%.
Netflix (NFLX +3.77%) went the other direction. Shares of the streaming giant rose about 4% Monday morning to about $80 as of this writing.
Some of the credit likely goes to Evercore ISI, which raised its price target on the stock to $110 from $100 before the market opened.
Still, the split makes sense to me. When investors get nervous about the price tag on the AI build-out, money can rotate toward growth stories that don't depend on it. And Netflix's cash-flow statement shows just how well the company fits that description.
Image source: Netflix.
Netflix's biggest bill is programmingNetflix put $9.9 billion of cash into content during the first six months of 2026, up 24% year over year. Its purchases of property and equipment (the offices, buildings, and equipment that count as capital expenditures) totaled $415 million over those same six months. In other words, for every dollar the company spent on hard assets, it spent more than $23 on series, films, and live events. At its first-half pace, this year's content spending would approach $20 billion.
Twenty billion dollars is a lot of content until you set it next to the companies building AI data centers. Alphabet (GOOG +3.06%) (GOOGL +3.22%) put $44.9 billion into property and equipment in the second quarter alone, roughly double what it spent a year earlier. The Google parent now plans between $195 billion and $205 billion of capital expenditures for 2026, and coming into the year, the four biggest builders of AI data centers were planning close to $700 billion of combined capital spending.
Zoom out, and Alphabet's single quarter of capital spending was more than double what Netflix will likely spend on content in all of 2026. And Netflix's entire base of property and equipment sits at just $2.4 billion on its balance sheet -- less than a week's worth of Alphabet's current pace of capital spending.
Billions left overNearly $10 billion of programming in six months is still an enormous outlay. Netflix's operations, however, already generate enough cash to cover every dollar of it, with billions to spare. Free cash flow (what's left of operating cash flow after purchases of property and equipment) totaled $6.6 billion in the first half of the year, up 34% year over year. Management continues to expect about $12.5 billion for the full year, which would be up more than 30% from 2025 -- though that growth gets a one-time lift from the $2.8 billion termination fee Netflix collected when the Warner Bros. deal fell through.
Revenue, for perspective, is forecast to grow 13% to 14% this year. The cash is growing about twice as fast as revenue.
Not only did Netflix buy back $4.7 billion of its stock in the second quarter (its largest quarter of repurchases yet), but it also has about $27 billion left on its repurchase authorizations.
Of course, the biggest AI spenders are headed the opposite direction. Reaching this year's capital budgets is expected to mean a sharp drop in the group's free cash flow, and the payoff on those data centers may be years away. A slower build-out would actually ease that cash strain, which may be why Monday's selling hit the companies that sell the hardware hardest.
Why is the stock still down 36%?The stock would need to climb more than 50% to get back to its 52-week high of about $125. And the reason it fell that far hasn't gone anywhere.
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Second-quarter revenue grew 13% year over year, a step down from 16% in the first quarter, and management expects about 12% for the third quarter. That pace has cooled every quarter this year, and it could slip a little more from here.
Also worth noting: Netflix isn't avoiding AI on principle. The company says it's using the technology to personalize its service and help produce its films and series. A slower AI industry wouldn't help Netflix -- it just wouldn't cost it much, either.
At about 21 times next year's expected earnings, the stock looks fairly priced to me if growth levels off. But if growth keeps slowing, it won't be.
Ultimately, Monday's sell-off was about whose business depends on the AI build-out continuing at full speed, and Netflix's doesn't.
The bigger issue for the stock is still its slowing growth. One good Monday doesn't settle that.
Netflix po spuštění nové koalice pro streaming posílil o 4 % a usiluje o širší přístup k právům na živé sporty. Amazon klesl o 0,7 % na 255 USD, Alphabet vzrostl o 3 % na 347,31 USD.
A new streaming policy coalition just handed Netflix a potential key to unlock live sports rights that have been legally off-limits, and the gap between Netflix's stock surge and its founding partners' shrug tells you exactly who stands to win.
Shares of Netflix (NASDAQ:NFLX | NFLX Price Prediction) are climbing Monday afternoon after the streaming giant helped launch a new policy coalition focused on how digital platforms compete for live entertainment and sports rights. Netflix stock is up 4% to $80.78, outpacing its sector benchmark by a comfortable margin. The move stands out because Netflix stock had entered the session down 14% year to date, so today’s rally is repairing damage rather than confirming a broader turn.
The coalition, called the Streaming Access and Choice Alliance, names Netflix as a founding corporate member. Amazon (NASDAQ:AMZN) joins as the second founding member on the roster. Alphabet‘s (NASDAQ:GOOGL) YouTube is the third, and the group is led by TechNet, a trade group representing large technology companies.
Alliance Sparks a Sports Rights Debate TechNet stated the coalition will advocate for “technology-neutral policies that encourage innovation in entertainment,” and the regulatory backdrop gives that mission real substance for Netflix. The Justice Department and the Federal Communications Commission opened an inquiry earlier this year into whether the Sports Broadcasting Act, which grants sports leagues an antitrust exemption allowing them to pool and sell television rights collectively, should be revisited. FCC chairman Brendan Carr has questioned whether too many sports rights are moving to paywalled streaming services under that exemption, and that is the gap the new alliance is designed to fill.
For Netflix, live sports is the one content category it can’t simply outspend its way into, because leagues sell those rights collectively under the antitrust exemption. Any loosening of that arrangement would widen the field Netflix is able to bid in, which is a big reason the coalition matters more to Netflix than to either of its two founding partners. The bear case is just as clean: a lobbying coalition is a multi-year process with no revenue attached, and Netflix stock remains in the red for the year even after today’s pop.
Netflix’s advertising ambitions frame the appeal as well, and this is where the payoff would show up first. Netflix has flagged its ad business as an accelerating revenue lever in 2026, and expanded access to live sports would give Netflix Ads Suite exactly the kind of appointment-viewing inventory that commands premium pricing from major brands. That gives Netflix a commercial incentive in the policy fight that its two founding partners don’t share to the same degree.
Peer Moves Tell the Real Story Amazon stock is down 0.7% to $255. Alphabet stock, meanwhile, is up 3% to $347.31, well shy of what Netflix is putting up on the session. That spread is the tell: a coalition that could reshape access to live sports rights is marginal for two companies whose revenue comes overwhelmingly from cloud, retail and search, and material for a company whose entire business is subscription streaming.
The muted Amazon stock reaction is worth its own note for Netflix stock watchers. Amazon’s ad business added Amazon Audiences for advertisers buying on Netflix earlier this year, so the two companies are already commercially interconnected on the ad side of the streaming ecosystem. That link makes the joint policy push a natural extension for Netflix and Amazon even when the stock reactions diverge as sharply as they are today.
Rotation is doing part of the work as well for Netflix. The Communication Services Select Sector SPDR Fund (NYSEARCA:XLC) is up 2% on the session, while the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.2%. Communication services names are being bought on a day the broad market is slightly lower, and Netflix is climbing at a much faster clip than its own sector fund.
What to Watch Next Netflix stock is still working off a year-to-date deficit, and today’s rally continues that repair rather than opening a fresh trend. Your position sizing in Netflix stock should reflect that context, with room to build gradually if the alliance’s messaging gains real regulatory traction. The coalition itself is a slow-moving story, not a quarter-to-quarter one, so patience matters here.
Investors can watch for whether the Justice Department and Federal Communications Commission inquiry produces any formal action tied to the Sports Broadcasting Act, since that is the concrete pathway to widening Netflix’s bidding options in live sports and shifting how leagues price digital rights. Netflix has also confirmed that it will announce third-quarter 2026 financial results in the weeks ahead, which sets up the next scheduled catalyst for the stock and a fresh read on the advertising ramp.
Contact [email protected] for any questions or corrections.
Netflix shares NFLX rose about 4.3% on Monday after Evercore ISI increased its price target on the streaming company to $110 from $100 and reiterated its Outperform rating.
The new target implies roughly 42% upside from Netflix’s previous closing price.
The brokerage cited improving subscriber trends in the United States and Japan, as well as growth opportunities from live events, short-form content and advertising.
Evercore analyst Kutgun Maral said Netflix’s penetration rate reached a multi-year high of 63% in the US.
In Japan, penetration rose to a record 22%, according to the brokerage’s surveys.
Churn intentions also improved in both markets, although customer satisfaction remained a concern in the US.
The findings came from Evercore ISI’s 58th quarterly US subscriber survey and its semi-annual survey in Japan.
The brokerage said the results strengthened its view that Netflix retains strong subscriber engagement and pricing power.
Netflix stock climbed 4.32% in morning trading to $80.74.
The valuation framework was extended to 2028, using 25 times the firm’s 2028 earnings-per-share estimate.
Citi also maintained a Buy rating and a $100 price target in a recent note.
Live events and short-form content offer growth opportunitiesEvercore identified live programming as a potential driver of subscriber growth and engagement.
In Japan, 45% of newly surveyed subscribers said they joined Netflix as part of the company’s World Baseball Classic promotion.
The survey also showed that the percentage of users who had watched live events increased to 60% in September from 42% in March.
The brokerage also highlighted Netflix Clips, the company’s short-form video feed.
Around 46% of Japanese respondents and 38% of US respondents said they had scrolled through the feature.
Evercore said live events and short-form videos could support engagement and retention.
The company’s advertising-supported tier was also attracting new and returning subscribers.
Netflix’s broader strategy remains focused on growing revenue and operating profit while managing content costs.
Management is targeting an operating margin of 31.5% this year, up from 29.5% last year and 26.5% two years ago.
Content costs increased 11.5% in the first half of 2026, while total viewing hours rose 2% year over year.
The company has also expanded its live programming and added lower-cost content, including video podcasts.
The advertising business is expected to generate approximately $3 billion this year.
A Motley Fool report said advertising could provide further growth through increased ad-supported viewing, new products and improvements to Netflix’s advertising technology.
Netflix also repurchased a record $4.7 billion of its shares in the second quarter. Its board had authorised an additional $25 billion in buybacks, with $27.1 billion remaining under existing authorisations at the end of June.
Evercore described Netflix as a sustainable 20% earnings-per-share growth company, although it expects the company’s catalyst path to become more visible in 2027 rather than 2026.
Netflix je podle článku ziskový, generuje stabilní cash flow a provádí zpětný odkup akcií. Tržby za poslední čtvrtletí vzrostly meziročně o 13,4 % na 12,6 miliardy USD.
Many investors have pegged Netflix (NFLX +1.83%) as "expensive" for years, due to it stock trading at a premium valuation in the late 2010's during the streaming growth boom. Even though it still has this reputation in 2026, Netflix is now profitable, generating consistent earnings for shareholders and returning cash through stock buybacks.
In fact, I would go against the grain and say Netflix shares are not expensive (as some people think, but cheap. Here's why.
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Durable growth from subscriptions, and now advertising As the leading premium video streaming service globally, Netflix continues to grow revenue through market share gains and by raising monthly subscription fees. Last quarter, revenue grew 13.4% year-over-year to $12.6 billion, with total sales up nearly 500% over the last 10 years.
Another monetization layer that is just getting started is advertising. Around the globe, Netflix is taking the billions upon billions of hours customers spend on its service and beginning to insert ads to improve monetization. A customer can still pay to go ad-free, but this will generate much more in sales from the lower-priced subscription tiers.
Advertising revenue is on track to reach $3 billion in 2026, representing around 6% of its overall revenue guidance of $51 billion for the year. Long-term, it is possible that advertising becomes a much larger % of revenue, which will drive durable revenue growth in the years ahead.
Image source: Netflix.
Returning capital to shareholders, but still going for global expansion Another reason investors were skeptical of Netflix stock was its lack of positive free cash flow. That has now changed, with free cash flow up to $11 billion in the last 12 months. Smartly, in my opinion, Netflix is using this free cash flow to begin returning capital to shareholders through share repurchases. Last quarter, it spent $4.7 billion on share buybacks and has reduced shares outstanding by 6% over the last five years, thereby accelerating earnings per share (EPS) growth.
At the same time, Netflix is not relaxing with its global ambitions. It is moving aggressively to acquire sports rights for its members, which will improve the value proposition of the Netflix bundle, giving it the leverage to raise subscription prices and sell more advertisements. For example, it is making a big push in American football, acquiring rights for Thanksgiving and Christmas games, along with an opener game in Australia.
NFLX Free Cash Flow data by YCharts
Why I think Netflix stock is now cheap The steady adoption of video streaming, advertising growth, and its push into sports should drive Netflix's sales growth for years to come. Some concerns may be warranted due to competition from other tech players like YouTube, but there is plenty of room in the media landscape for many players to thrive.
At current prices, with Netflix stock sneakily in a 43% drawdown with the market near highs, shares look cheap. It has a price-to-earnings ratio (P/E) of 24, which is not overly cheap on its face, but much cheaper than historical levels.
If Netflix can drive strong earnings per share (EPS) growth with revenue growing in the double-digits, combined with a steadily dropping share count, this P/E ratio will fall in the years ahead, likely leading to a rising Netflix share price.
Many investors are hesitant to buy a stock after it has risen 1,000-fold (yes, Netflix shares have risen by more than 1,000x since its IPO), given its historical reputation for being expensive. But if you look at Netflix's financial performance and growth potential, the stock is objectively cheap at these levels, and I would buy because of it.
Florida žaluje Netflix kvůli údajnému tajnému sledování dětí pro inzerenty a žádá miliardy dolarů na odškodnění. Případ může ohrozit byznys rychle rostoucí reklamní divize.
Florida is suing Netflix for billions, accusing the streaming giant of secretly tracking children for advertisers while publicly promising families a safe alternative to social media surveillance. The outcome could unravel the economics powering Netflix's fastest-growing business.
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Florida has sued Netflix (NASDAQ:NFLX | NFLX Price Prediction), and the case directly challenges the story Netflix has told advertisers, regulators, and parents for years: that a subscription streamer is a fundamentally different animal from a surveillance-driven social platform. In the 66-page lawsuit, Florida accuses Netflix of carrying out a “years-long bait-and-switch”, saying the company promised families an escape from ad-tech tracking.
Then, once its ad tier launched, it collected detailed information about children and households and shared that data with advertising platforms and brokers without the consent Florida law requires. The complaint says advertisers could then target Floridians by life stage, income, and household composition. It lands as Netflix scales an ad business it has told investors is central to the next leg of growth, which is why a state consent case reads, for shareholders, as a business-model case.
What Florida Alleges, and What Netflix Says Back The state frames this as deliberate escalation, not a one-off. The Florida case follows one earlier lawsuit filed this year by Texas officials accusing Netflix of spying on children and designing its platform to be addictive. Florida also stayed out of a large multi-state technology settlement, choosing to litigate on its own.
The financial stake is stated in broad terms. Attorney General James Uthmeier said, “We’re going to send a message to big tech companies. If you hurt our kids, you are going to have to pay for it. And so, in this lawsuit, we will be seeking billions of damages.” That is an intention, not an amount at risk, according to the Florida Office of the Attorney General.
Netflix says the suit lacks merit, that it complies with privacy and data-protection laws everywhere it operates, and that it maintains dedicated safeguards for children, an annually refreshed privacy statement and terms of use, and parental controls that filter or block content. These are allegations, and no court has ruled on them.
The kids surface area is substantial. Netflix has been building here: the standalone Netflix Playground kids gaming app launched in the US, Canada, the UK, Australia, the Philippines, and New Zealand, and kids mobile games engagement is up 600% year over year, according to The Guardian.
Why Consent Rules Bite the Ad-Tier Economics Audience data makes an ad-supported minute worth more than a subscription minute, so consent rules directly affect unit economics. Management has been explicit that closing the monetization gap is the opportunity: “There’s still a gap between ad tier arm and then arm for our standard without ads tier, according to The Guardian. But that gap is narrowing,” co-CEO Greg Peters told analysts on the Q2 2026 call.
The scale-up is real. Netflix expects 2026 advertising revenue to roughly double to about $3 billion, advertiser count grew 70% year over year to more than 4,000 clients, and the ad-supported tier accounted for more than 60% of Q1 2026 sign-ups in ad-supported countries. A consent regime that restricts household-level targeting would hit the arm side of that equation more than the sign-up side.
Legal exposure and reputational exposure move independently here. A Florida judgment years out is one risk; a narrative that Netflix quietly behaved like the ad-tech platforms it distanced itself from is faster, because it travels through advertiser trust and parental trust at the same time.
Netflix’s own framing invites the scrutiny. On the call, management described “data that we can draw on to constantly improve every aspect of the business” as a strategic asset, without specifying what data or how it is used for targeting.
Where NFLX Stock Is Now The stock is already under pressure. NFLX closed at $76.01 on September 10, 2026, down 18.93% year-to-date and 39.08% over the past year, against a P/E near 28x and a full-year revenue guide of $51.0 billion to $51.4 billion with a 31.5% operating margin.
The core business is still compounding. Q2 2026 revenue rose 13.4% year over year to $12.56 billion, EPS of $0.80 beat the $0.79 estimate, and the board authorized an additional $25 billion buyback with $27.1 billion remaining.
Against the fundamentals, one state consent case, even a serious one, is unlikely to reprice the equity on its own unless it triggers copycats that constrain targeting across the ad tier. That is the risk worth tracking, alongside the pending roughly $700 million Brazilian tax deposit shifted into 2026.
The ad-tier thesis remains intact, and cash generation supports the buyback, while the child-data litigation has become a category risk that will persist beyond headlines, and the reputational channel is what would compress the multiple before any court ruling arrives.
Contact [email protected] for any questions or corrections.
Over the past ten years, Netflix's (NFLX -1.09%) stock has rallied 670% and outperformed the S&P 500's (^GSPC -0.34%) 260% gain. I regularly covered Netflix throughout that decade, but I alternated between bullish and bearish positions. I also never bought the stock.
While I admired Netflix's evolution from a DVD rental company into a streaming video giant, I was concerned about its competitive threats, rising expenses, and high valuation. Today, I'll take a fresh look at those strengths and weaknesses to decide if it's a worthwhile investment.
Image source: Getty Images.
Why did Netflix pull back from its all-time high? Netflix's stock closed at a record high of $133.91 per share on June 30, 2025. But as of this writing, it trades at about $77. Several changes and challenges caused that pullback.
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For many years, investors tracked Netflix's growth by its subscriber count. But starting in the first quarter of 2025, Netflix stopped reporting those subscriber numbers. It claimed its overall subscriber numbers were becoming less relevant, since the introduction of its ad-supported and paid sharing plans changed the value of each subscriber. Netflix also plans to start disclosing its engagement and viewing hours just once a year (rather than twice) in 2027. Those jarring changes suggested that Netflix's high-growth days were over.
Netflix claims that its revenue, operating margin, and free cash flow (FCF) provide investors with a clearer picture of its overall growth. However, Netflix's year-over-year revenue growth decelerated over the past two quarters, while its FCF turned negative in its latest quarter.
Metric
Q2 2025
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Revenue Growth (YOY)
15.9%
17.2%
17.6%
16.2%
13.4%
Operating Margin
34.1%
28.2%
24.5%
32.3%
33.4%
FCF Growth (YOY)
87%
21.3%
35.9%
91.4%
(32.7%)
Data source: Netflix. YOY = Year-over-year.
Netflix expects its revenue to only rise 11.7% year over year in the third quarter. That slowdown can be attributed to the fading impact of its paid sharing plans, the saturation of its top markets (especially the U.S. and Canada), the slower-than-expected expansion of its ad-supported tiers, and a lack of new price hikes following its aggressive, multi-tier increases in 2024 and 2025.
Netflix also released more hit shows (Stranger Things, Squid Game, and Wednesday) and movies (K-Pop Demon Hunters) in 2025. Those tough year-over-year comparisons are exacerbating its slowdown, and its FCF is declining as it ramps up its spending on new content.
Another red flag was Netflix's attempt to buy Warner Bros. Discovery (WBD -0.45%) for $83 billion. Although it ultimately lost that bidding war to Paramount Skydance (PSKY -4.77%) in February (which boosted its first-quarter FCF with a $2.8 billion breakup fee), that bid indicated it was running out of room to grow organically. That's troubling because Netflix is often known for creating new hit IPs rather than acquiring existing ones.
Is Netflix still worth buying today? From 2025 to 2028, analysts expect Netflix's revenue and EPS to grow at CAGRs of 12% and 22%, respectively. It isn't growing as rapidly as it did over the past decade, but it's still growing faster than traditional media companies like Paramount and Disney.
Netflix's stock also looks reasonably valued at 21 times next year's earnings. At its all-time high last October, it was trading at 37 times this year's earnings. That high valuation was unsustainable, since Netflix shouldn't be valued as a high-growth tech stock, but its current valuation seems fair for a higher-growth media company.
With over 300 million paid global members (as of the end of 2024), a growing content catalog, and the scale to generate stable profits from a capital-intensive business model, Netflix remains a solid long-term investment. It probably won't replicate its gains from the past decade over the next ten years, but it will remain a top play on the streaming media market.
The U.S. streaming giant faces fresh regulatory scrutiny in South Africa as authorities examine the cost of digital media and communications services for consumers.
South Africa’s telecommunications regulator plans to investigate prices charged by so-called over-the-top service providers, including Netflix and Meta Platforms Inc.’s (NASDAQ:META) WhatsApp, Bloomberg reported on Monday, citing Business Day.
South Africa Reviews Digital Service CostsThe Independent Communications Authority of South Africa plans to assess what consumers pay for digital services as part of the inquiry, according to the report.
The regulator will separately investigate telecommunications-service costs, potentially affecting major operators including MTN Group Ltd., Vodacom Group Ltd., Telkom SA SOC Ltd. and Cell C Holdings Ltd.
South Africa’s telecommunications-service costs rank among the highest globally, according to the report.
Regulator Builds on Earlier Pricing ReviewsThe inquiry follows previous regulatory reviews of data-service costs and monitoring of prices after authorities allocated high-speed internet spectrum and introduced measures aimed at increasing competition.
The latest move also follows an effort by South Africa’s communications minister to bring in experts to identify policies and other interventions that could lower consumer prices.
The planned review places Netflix and other digital-service providers under closer scrutiny as regulators examine the affordability of services delivered over telecommunications networks.
The regulator had not provided additional comment when Bloomberg sought a response outside normal business hours.
Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $90.67. Recent analyst moves include:
Wolfe Research: Outperform (Raises target to $95 on Aug. 25) Baird: Outperform (Lowers target to $90 on July 22) Morgan Stanley: Overweight (Lowers target to $83 on July 17) Top ETF Exposure REX FANG & Innovation Equity Premium Income ETF (NASDAQ:FEPI): 6.86% Weight Global X PureCap MSCI Communication Services ETF (NYSE:GXPC): 4.55% Weight Pathfinder Focused Opportunities ETF (NASDAQ:PFOE): 4.72% Weight Significance: Because Netflix carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
NFLX Price ActionNetflix shares were down 2.28% at $76.47 at the time of publication on Tuesday, according to Benzinga Pro data.
Photo: Shutterstock
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Netflix uvedl, že jeho reklamně podporovaný plán nyní oslovuje více než 250 milionů měsíčně aktivních diváků. Firma čeká, že tržby z reklamy letos zhruba zdvojnásobí na asi 3 miliardy USD.
Streaming giant Netflix (NFLX -1.89%) told advertisers in May that its ad-supported plan now reaches more than 250 million monthly active viewers, up from 190 million last November.
And the money is following the audience. Management expects advertising revenue to roughly double this year, to about $3 billion. It's a small piece of the company's forecast of about $51 billion in total revenue for 2026 -- but easily the fastest-growing piece.
I don't think the doubling stops this year, either. I predict Netflix's advertising revenue passes $6 billion in 2027.
The case rests on three things the company already discloses: a growing viewer base, more countries to sell ads in, and ad revenue per viewer with plenty of room to rise.
Image source: Netflix.
The audience is still growing quicklyA monthly active viewer, in Netflix's definition, is a member who watched at least one minute of ads in a month, multiplied by the estimated number of people in that household. The household estimate comes from Netflix's own research, not a third-party firm.
The definition matters because it changed. In May 2025, Netflix counted 94 million monthly active users (profiles, not people), and Amy Reinhard, the company's president of advertising, said at the time that the figure translated to about 170 million viewers.
In other words, the audience didn't nearly triple over the past year, as the headline numbers suggest. Measured viewers against viewers -- a close but not perfect comparison -- it grew by about half. And that's still impressive growth for an audience this large.
The ad plan is also where new members go. Notably, Netflix said more than 60% of sign-ups choose it in the countries where it's available, and more than 80% of ad-plan members watch every week.
More countries are on the way, too. Starting next year, the plan is set to launch in 15 more, including Sweden, Poland, Indonesia, and the Philippines -- on top of the dozen markets where it sells ads today.
Can the revenue double again?In 2025, only the company's third year selling advertising, ad revenue grew to over $1.5 billion (more than 2.5 times its 2024 level). And this year's forecast calls for a rough doubling on top of that.
About $3 billion spread across more than 250 million viewers works out to about $12 per viewer a year, or about a dollar a month. Meanwhile, members pay $8.99 a month just for the U.S. ad plan's subscription, following a price increase in March. (That price is per account, while the ad figure counts every viewer in a household.) In other words, the advertising half of this business still brings in very little per viewer. Even doubling ad revenue on today's audience would only take that figure to about $2 a month.
Advertisers appear willing to pay up. Netflix said in August that commitments from its U.S. upfront (the annual negotiation in which advertisers lock in spending early) nearly doubled this year. Reinhard told advertisers in May that 44% of the members who see an ad on Netflix never see that ad on broadcast TV or other streaming services.
Sure, new ad markets typically start slowly, and a weak economy could cut advertising budgets faster than subscriptions. But if the audience keeps climbing and Netflix earns a bit more ad revenue per viewer, $6 billion is within reach.
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Even $6 billion wouldn't fix everythingAdvertising matters this much because growth elsewhere is cooling. Netflix's second-quarter revenue grew 13% year over year, down from a 17.6% pace in the fourth quarter of 2025, and management forecasts 11.7% for the third quarter. Each quarter has been slower than the last.
Another doubling would mean about $3 billion of new revenue in 2027, or about 6 percentage points of growth on this year's forecast base. For the growth stock, that could be the difference between total growth sliding toward single digits and holding in the low teens.
What advertising can't do is carry the company. Advertising ultimately sells attention, and attention is barely growing. Netflix members watched more than 97 billion hours of content from January through June, up just 2% from the same period of 2025.
Even at $6 billion, advertising would be barely more than a tenth of the streaming service's revenue. Memberships and pricing still set Netflix's growth rate.
So, does Netflix's advertising revenue pass $6 billion in 2027? I believe it does. The audience keeps growing, and the ad revenue per viewer is still tiny.
As for Netflix stock, it trades near $77 as of this writing, or about 20 times expected 2027 earnings. That's arguably a reasonable price. But with growth cooling outside the ad line, I'll watch from the sidelines for now.
There's no denying Netflix's (NFLX -5.35%) highest growth days are (probably) in the past rather than in the future. Not only did its second-quarter year-over-year revenue growth of 13.4% -- the weakest growth rate of the past four quarters -- to $12.56 billion miss analysts' already-lowered expectations of just under $12.59 billion, but revenue guidance for the quarter currently underway was also disappointing, at only 11.7% better than 2025's Q3 comparison.
Sensing this headwind could mark the beginning of a more sweeping slowdown for the entire streaming business, Netflix stock has performed poorly since April, and really, since reaching a record high in the middle of last year. That's when the whole industry's transition from its growth phase to its slower, fully mature phase began to become clearer.
Nevertheless, long-term growth investors might want to own a stake in the streaming giant anyway, despite its complete lack of dividends. Here's why.
Image source: Getty Images.
Being first, and now biggest, makes all the difference While Netflix's future numbers will almost certainly look weaker, the stock is still a solid buy for a pair of related reasons. Those are, (1) the streaming business is here to stay, and (2) Netflix is positioned to continue dominating it.
That doesn't mean competitors aren't trying to dethrone the market leader. In fact, numbers from TV-ratings agency Nielsen indicate that over the course of the past year, U.S. consumers are -- albeit only slightly -- decreasingly tuning into Netflix. Netflix is still the leading streaming name within the United States though, and according to data from Hub Research, the first streaming platform U.S. consumers visit when they turn their television on.
It isn't doing too shabbily outside of the U.S. either. Its European and Middle East arm's revenue improved 11% on a currency-neutral basis last quarter, and grew 16% in Latin America. Even its relatively small Asia/Pacific operation experienced a neutral sales growth 18% during the second quarter of 2026. That's encouraging, particularly given that Netflix currently serves fewer than half of the planet's broadband customers, and its programming only accounts for a tiny fraction of the world's total television viewing time.
In other words, there's room to continue growing even if its domestic presence may be peaking, according to Pew Research, a market-leading 72% penetration rate of U.S. households
Perhaps more importantly, there's good reason to believe Netflix can and will continue growing here and abroad, particularly now that it offers an ad-supported option.
The foundation for this continued growth is two-fold.
The first of these folds is the fact that being the first name of its kind in the streaming business (it arguably created the streaming business, in fact) as well as the most entrenched, Netflix is the yardstick by which consumers measure all other streaming services. Indeed, the brand name itself is almost synonymous with the word "streaming" itself. That's powerful. It means Netflix is the name consumers consider first. It also means Netflix has its pick of potential partners, if and when it chooses to forge such relationships.
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The other piece of the argument that Netflix is positioned to continue delivering value-building growth is its sheer size and scale, and everything that comes with it. And chief among these upsides is wider profit margins.
Although most major streaming platforms are now profitable on an operating or EBITDA basis, it's still unclear whether they are producing actual net profits. Netflix most definitely is, though. Despite this year's slowdown, through the first half of 2026, roughly $6.0 billion (24%) of its $24.8 billion in year-to-date revenue was turned into ordinary net income, easily making this company the most profitable name in the streaming business. As such, it can spend as much as it needs to in order to remain ahead of its competitors. In light of this, the streaming industry's broad slowdown actually works to Netflix's advantage, making it more difficult for rivals to achieve the subscriber growth needed to better compete with the industry's titan.
Netflix's larger top- and bottom-line results are also a testament to the quality and depth of its content library, much of which is self-produced.
Durable dominance Will there ever come a time when Netflix just runs out of growth runway? Sure. Nothing lasts forever.
That point is many, many years down the road for Netflix, though, and there's plenty of opportunity for growth between now and then. An outlook from Mordor Intelligence suggests the worldwide streaming market is set to grow at an average annual rate of nearly 11% through 2031, matched by global growth of the ad-supported streaming business that Netflix is now in.
Netflix could continue growing nicely for far longer than that, though, simply because it's got a powerful brand name that can be leveraged in a number of ways beyond the conventional delivery of on-demand entertainment content. This includes a deeper dive into theatrical films, the licensing and monetization of home-grown intellectual property, video gaming, and more. Indeed, it's not inconceivable that Netflix could eventually even develop its own cable channel, utilizing the very cable television business it's largely forced into a massive reset.
Bottom line? Unlike its competitors, Netflix isn't just another struggling streamer that looks more like a late-to-the-party afterthought than a strategically intentional concept. It's a reliably viable business with a powerful brand name that can be leveraged in a bunch of different ways. That's the long-term growth potential you'd be buying into ... even if it doesn't pay dividends in the meantime.
Netflix je podle BMO Capital Markets stále na nákup s cílovou cenou 135 USD, což znamená zhruba 73% potenciál růstu. Konsenzus analytiků je 93,66 USD, asi 20 % nad aktuální cenou 78,25 USD.
Netflix has shed more than a third of its value while the broader market climbs, yet one Wall Street analyst sees a path back that would leave today's sellers deeply regretting their exits.
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Netflix currently trades at $78.25 while the average Wall Street price target sits at $93.66. That leaves a gap of roughly 20% between the current quote and consensus.
Netflix (NASDAQ:NFLX | NFLX Price Prediction) is the world’s largest subscription streaming service, guiding 2026 revenue to $51.0B to $51.4B with an ad-supported tier on track to roughly double. Wall Street has watched the name closely as it flipped from streaming’s untouchable growth story to a battleground stock in the span of nine months. Consensus isn’t even the aggressive read here: BMO Capital Markets carries a Street-high target of $135 on the shares.
What Went Wrong Between January and Summer Netflix has shed over a third of its value in a year, down 37.77% over 12 months and 16.54% year to date. The unraveling accelerated when Netflix announced an all-cash acquisition of Warner Bros. at $27.75 per share in late 2025, pausing buybacks and hitching the story to a $42.2B bridge facility. Q3 2025 earnings then missed on a $619 million Brazilian tax charge that compressed operating margin to 28.2%.
The saga got messier. Netflix terminated the original WBD agreement in Q1 2026 and paid a $2.80B breakup fee, which hit free cash flow through higher cash taxes. Free cash flow fell to $1.53B in Q2 from $2.27B a year earlier. The S&P 500, meanwhile, is up 12.94% year to date. Netflix moved sharply in the opposite direction.
Why the Sell-Side Is Still on Board BMO Capital Markets’ Brian Pitz carries the Street-high $135 target, which implies roughly 73% upside from current levels. His Outperform thesis rests on three pillars: an ad-tier monetization super-cycle, a content moat that protects churn and pricing power, and structural margin expansion as advertising and password-sharing revenue flow directly to operating income.
Management has given analysts real numbers to underwrite. Netflix reiterated 13% to 14% full-year revenue growth, roughly $6 billion of incremental revenue, and about $12.5B of free cash flow for 2026. Ad revenue is tracking to ~$3B this year. Q2 buybacks of $4.7B were the largest quarterly repurchase in company history, with $27.1B still authorized.
CFO Spence Neumann framed the runway plainly on the Q2 call: “We’re entertaining an audience approaching a billion people, with still lots of room to grow into our addressable market on every measure.”
Coverage skews bullish. Of the analysts polled, 7 rate the stock Strong Buy, 29 Buy, and 15 Hold, with no active Sells. Recent 30-day revisions have leaned negative as models digest WBD-related noise, but no house has capitulated on the story.
Where Netflix Stands Against Streaming Peers Netflix fell largely alone. The rest of the streaming complex is a mixed bag.
Walt Disney (NYSE:DIS) trades at $105.31 against an average target of $128.18, implying roughly 22% upside. Shares are down 6.71% year to date, cushioned by the Experiences segment. Ratings skew positive with 6 Strong Buy and 24 Buy against 2 Hold and 1 Sell. Real upside, but a fraction of what BMO sees at Netflix.
Warner Bros. Discovery (NASDAQ:WBD) trades at $28.25 with an average target of $29.82, or roughly 6% implied upside. WBD is now the subject of a Paramount Skydance merger after Netflix walked, and analyst posture is cautious with 2 Buy, 16 Hold, and 1 Strong Sell. The pending deal caps the story.
Roku (NASDAQ:ROKU) trades at $155.59 versus a $162.33 target, roughly 4% implied upside. Roku is up 43.41% YTD, showing exactly the momentum Netflix lost. Coverage sits at 1 Strong Buy, 9 Buy, 15 Hold, and 1 Strong Sell.
The largest analyst-implied upside in this group sits with Netflix, whether measured against the $93.66 average or BMO’s $135. Peers have re-rated with the market. Netflix has lagged behind that reset.
What the Numbers Actually Say Netflix trades at $78.25 with an average 12-month target of $93.66 across covering analysts, implying roughly 20% upside, while BMO’s $135 Street-high implies roughly 73%. The stock is down 16.54% year to date and 37.77% over 12 months, against a 12.94% YTD gain and 18.65% one-year return for the S&P 500. Analyst targets are one data point among many.
Forward EPS consensus sits at $3.5844 for 2026 and $3.8184 for 2027, on revenue of $51.22B and $57.01B. Trailing P/E is 25 and forward P/E is 22. Multiples have compressed while the growth trajectory has held.
Where I Land on Netflix Right Now Netflix looks compelling here if management delivers on the 2026 plan (guided revenue, $12.5B of free cash flow, ~$3B in ad revenue) and if the WBD situation either resolves at reasonable terms or gets abandoned again without further balance sheet damage. The path back to consensus is unglamorous: execute, scale ads, and let the $27.1B remaining buyback authorization keep shrinking the share count.
The bear case rests on the WBD chapter being a strategic mistake priced with real integration and financing risk, or if competitive pressure from Disney, YouTube, and Amazon compresses margins from the current 33.4% operating rate. A $1B debt maturity later in 2026 and ongoing tax disputes add overhang.
My lean: this looks more like a rare value setup for a name that seldom offers one, provided the WBD situation resolves without another surprise. The BMO $135 case requires the entire bull thesis to fire, but even the consensus $93.66 offers a defensible re-rating path from here.
Contact [email protected] for any questions or corrections.
Netflix (NFLX -5.35%) raised prices on every one of its U.K. plans in the past few days. The ad-supported standard plan took the biggest jump, moving from £5.99 to £7.99 a month (a third more), while the ad-free standard plan went to £13.99 and premium to £20.99. New members pay the new prices right away, and existing members typically get 30 days' notice before the change reaches their bills.
Shares of the streaming giant fell 5.4% on Friday to $78.25, the same day the increase made headlines.
Price increases are nothing new for this company, though. Netflix has been raising prices for 15 years, in markets all over the world, and its annual revenue has grown every single year through all of them.
But that streak is a low bar. The better measure, I'd argue, is what each increase did to the company's revenue growth rate -- and that record is more interesting than the streak itself.
Image source: Netflix.
The increases are coming fasterNetflix last raised U.K. prices in February 2025, when the ad-supported plan went from £4.99 to £5.99 a month. That makes this the second U.K. increase in about 19 months, and it leaves the ad tier costing 60% more than it did at the start of last year.
Netflix raised U.S. prices in March too, its second increase there in about 14 months, taking the standard plan from $17.99 to $19.99 a month.
Notably, the ad-supported tier (the plan built to catch price-sensitive members) is climbing fastest in both markets.
Revenue has grown through every increaseThe worst increase Netflix ever made came in July 2011, when the company split its $9.99 streaming-plus-DVD plan into two $7.99 plans. Management acknowledged in its second-quarter 2011 shareholder letter that the change could be "as much as a 60% increase" for members who wanted to keep both services.
Hundreds of thousands of members canceled. Netflix ended the third quarter of 2011 with about 23.8 million U.S. subscribers, down about 805,000 in three months. And still, revenue rose 48% that year, and it grew another 13% in 2012.
The closest the streak has come to breaking was 2022. Netflix had raised U.S. prices that January, taking the standard plan from $13.99 to $15.49, and revenue for the year grew just 6.5% -- the company's slowest year of growth in at least a decade. A subscriber slump and a strong dollar contributed too. Even then, the top line grew. Growth stayed slow in 2023, then reaccelerated: revenue rose about 16% in both 2024 and 2025, reaching $45.2 billion last year, and 2025 opened with another round of U.S. price increases.
In short, no Netflix price increase has ever been followed by a down year of revenue. Where an increase can show up is in the growth rate, and even the clearest case took more than pricing to get there.
What's different this time is where the increase lands. Netflix's advertising business is its fastest-growing revenue line (ad revenue topped $1.5 billion in 2025, up more than 150%, and management is aiming to roughly double it this year), and that business depends on the ad-supported plan attracting members. Raising the plan's price by a third may test how much that audience is willing to pay.
The early evidence from the U.S. increase looks fine. In the shareholder letter accompanying its second-quarter results, Netflix said U.S. and Canada revenue grew 10% year over year, with what it described as only a partial quarter of impact from the March increase. The change, in management's words, "has gone well and as expected."
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The companywide trend deserves more caution. Second-quarter revenue growth was 13% year over year, and the forecast for the third quarter is 11.7% -- a decelerating path. Full-year revenue guidance sits at $51.0 billion to $51.4 billion, or 13% to 14% growth, down from nearly 16% in 2025.
Meanwhile, engagement is nearly flat, with members watching only 2% more hours in this year's first half than in last year's. In other words, more members, higher prices, and advertising are carrying the growth, not more hours watched.
Ultimately, I expect the streak to survive this increase too. That kind of pricing power, I think, is rare, and Netflix has proved it over and over.
But the stock's valuation arguably already gives the company credit for it. At about $78, the price-to-earnings ratio is about 20 measured against expected 2027 earnings, a level that arguably assumes the pricing power continues.
Key Takeaways Netflix shares have rebounded as investors focus on the scaling of its advertising business.Netflix expanded AI ad tools and programmatic access while seeing strong interest in live-event inventory.Ad revenues are expected to roughly double to $3 billion in 2026, with clients up 70% year over year. Netflix (NFLX - Free Report) shares have climbed sharply off their 2026 lows in recent weeks, and the advertising business is emerging as the central thread in that recovery narrative. As the stock works to claw back ground lost earlier this year, investor attention has increasingly shifted toward how quickly the company's ad-supported tier can scale and what that means for the broader growth story.
The renewed focus follows a set of developments the company has flagged around its advertising operations. In its most recent shareholder communication, Netflix said it expanded AI-powered tools across the advertising lifecycle — spanning planning, creative production, campaign management and reporting — and extended programmatic access to Pause Ads and live inventory, a move aimed at opening the platform to a broader range of buyers, including smaller advertisers previously limited by manual processes. The company also noted that its U.S. upfront negotiations were in advanced stages, with commitments expected to close in the following weeks, and pointed to strong advertiser interest in its live-event lineup.
These initiatives sit against a backdrop of steady financial performance. For the second quarter of 2026, Netflix reported revenues of $12.56 billion, up 13% year over year, with operating margin at 33.4% and earnings per share of 80 cents. The company repurchased $4.7 billion of stock during the quarter, its largest buyback quarter on record, leaving $27.1 billion in remaining authorization. On advertising specifically, Netflix has guided toward roughly doubling ad revenues to approximately $3 billion in 2026, with an advertiser base that had grown to more than 4,000 clients, up 70% year over year, as of its most recent count.
Looking ahead, the company reiterated its full-year revenue outlook of $51 billion to $51.4 billion, implying 13-14% growth, alongside a 31.5% operating margin target and roughly $12.5 billion in free cash flow, with growth in memberships, pricing and advertising cited as the primary drivers for the remainder of the year.
With the ad business still a fraction of total revenues but expanding at a rapid clip, its trajectory over the next two quarters is likely to remain a key determinant of whether Netflix's stock recovery has staying power.
Competitors Show Divergent Ad Growth PathsAmong U.S. rivals pursuing similar ad-supported growth, Disney (DIS - Free Report) and Comcast (CMCSA - Free Report) offer contrasting benchmarks. Disney's direct-to-consumer advertising revenues rose 3% in its fiscal third quarter, with Disney's Entertainment segment ad sales actually dipping 1% even as Disney's ESPN business offset the softness. Comcast, by contrast, posted a sharper trajectory: Peacock's advertising revenues jumped nearly 70% in the second quarter, aided by World Cup and NBA coverage, helping Comcast's streaming arm turn profitable for the first time. Comcast's faster ad ramp contrasts with Disney's steadier, subscription-led model, underscoring how differently each rival is monetizing its streaming audience.
NFLX’s Price Performance, Valuation & EstimatesShares of Netflix have plunged 11.8% year to date, underperforming the Zacks Broadcast Radio and Television industry and the Zacks Consumer Discretionary sector’s decline of 10.8% and 9.3%, respectively.
NFLX’s YTD Share Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Netflix appears overvalued, trading at a forward 12-month price-to-sales ratio of 6.24X, higher than the industry’s 3.17X. NFLX carries a Value Score of D.
NFLX’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NFLX’s 2026 earnings is pegged at $3.59 per share, unchanged over the past 30 days. This indicates a 41.9% increase from the previous year.
NFLX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Jim Cramer označil Netflix za „buy“, ale ne za velký nákup. Firma zároveň oznámila tržby 12,56 miliardy USD a rekordní zpětný odkup akcií za 4,7 miliardy USD.
A longtime Netflix shareholder put Jim Cramer on the spot after watching shares lose more than a third of their value, and his answer about whether to hold, add, or sell reveals just how conflicted even the bulls have become.
A longtime Netflix shareholder called into Mad Money last week wondering if Netflix (NASDAQ:NFLX | NFLX Price Prediction) is still the same company he originally bought: “I’ve been a believer in the importance of corporate leadership just like you, and I’ve been very patient,” he said.
However, he added his reasons for concern: “Since February, and what I think was a very poorly managed Paramount offer, and now with Reed Hastings no longer at the helm, I’m starting to wonder if this is really the same company I invested in.“
The caller closed by saying: “Is it time to hold, add, or sell Netflix? What do we do?”
Jim Cramer Cautiously Believes in Netflix Cramer responed that he’s cautiously bullish on Netflix: “I think that Netflix is a buy, not a huge buy. I mean, I wouldn’t put a lot of money, but I think you can bounce here,” he said.
He then validated the caller’s discomfort with recent sector dealmaking: “In the time, the whole Warner Bros. Discovery delivery, it left me cold, too.” Yet he still has faith in the operators: “I do think these are still the great guys that have built a terrific company.”
Netflix’s Record $4.7 Billion Buyback Meets Slower Cash Flow Netflix’s Q2 FY2026 earnings report gives investors something to weigh. Revenue of $12.56 billion grew 13.4% year over year, EPS came in at $0.80 against a $0.79 estimate, and operating margin reached 33.4%. Free cash flow, however, fell to $1.53 billion from $2.27 billion a year ago. Netflix repurchased $4.7 billion of stock, its largest quarterly buyback ever, with roughly $27 billion of authorization remaining. Full-year guidance calls for $51.00-$51.40 billion in revenue, a 31.5% operating margin, and roughly $3.00 billion of ad revenue.
The stock reflects the skepticism. Shares closed at $79.84 on August 27, down 34.74% over the past year and 14.85% year to date, though up 10.29% over the past month. Netflix trades at a 26 trailing P/E with 29 Buy and 7 Strong Buy ratings versus 15 Holds.
Key Takeaways Cramer’s Netflix call is cautiously bullish: he sees potential for a bounce but would limit his position size. Revenue growth and substantial buybacks support the business case, while lower free cash flow and concerns about leadership and dealmaking temper confidence. His answer to an uncertain shareholder is to keep a small position.
Contact [email protected] for any questions or corrections.
Netflix posílil herní strategii exkluzivním prvním pohledem na Grand Theft Auto VI 27. srpna a měl šestihodinový náskok na 27 minut nových záběrů. Tvrdí také, že jeho herní tituly zvyšují zapojení uživatelů. Přímý příspěvek her k tržbám ale zatím nezveřejňuje.
Key Takeaways Netflix's GTA VI partnership strengthens its strategy of aligning with major gaming moments.Netflix saw strong game debuts, while Playground daily players tripled and kids' engagement rose 600%.Games remain an engagement driver, with direct revenue contribution still unquantified. Netflix's (NFLX - Free Report) push into gaming took its highest-profile turn yet on Aug. 27, when the company aired an exclusive extended first look at Grand Theft Auto VI, giving subscribers a six-hour head start on 27 minutes of new footage before Rockstar Games released it on YouTube and its own channels. The tie-up, described by Netflix as a first-of-its-kind partnership, arrives ahead of GTA VI's Nov. 19 launch on PlayStation 5 and Xbox Series X/S and follows Netflix's earlier addition of GTA: The Trilogy to its mobile game library. The collaboration extends Netflix's strategy of aligning itself with major gaming cultural moments rather than only producing its own titles.
That strategy has shown early traction elsewhere in the games unit. In its second-quarter 2026 shareholder letter, Netflix said its cloud-based TV games notched their two most successful debuts to date in June with FIFA World Cup: Launch Edition and Unhinged. Netflix Playground, the standalone app for kids' games, launched in April, has seen daily players triple since launch, and kids' mobile game engagement is up 600% year over year, though from a small base. Netflix has organized its games effort around four categories — narrative, party and puzzle, mainstream, and kids — and continues to frame the segment as an engagement driver rather than a standalone revenue source.
On the financial side, Netflix reported second-quarter revenues of $12.6 billion, up 13% year over year, with an operating margin of 33.4%. The company narrowed its full-year 2026 revenue forecast to $51.0-$51.4 billion and reiterated a 31.5% operating margin target, with growth attributed primarily to membership gains, pricing and advertising rather than games. View hours grew 2% in the first half of 2026, and Netflix noted gameplay hours are not included in that figure. Games remain unbroken out in Netflix's financial disclosures, leaving their direct revenue contribution unquantified for now.
Gaming Peers: Take-Two Interactive and RobloxUnlike Netflix, Take-Two Interactive (TTWO - Free Report) and Roblox (RBLX - Free Report) already generate the bulk of their revenue directly from gaming. Take-Two, the publisher behind GTA VI through its Rockstar Games label, reported net bookings of roughly $1.5 billion in its most recent quarter, with GTA VI positioned as its primary growth catalyst. Roblox, meanwhile, continues to scale bookings and daily active users through its user-generated content platform and virtual economy. Both Take-Two and Roblox operate gaming as a core, monetized business line, a structural contrast to Netflix, where games remain an engagement-linked feature rather than a disclosed revenue segment.
NFLX’s Price Performance, Valuation & EstimatesShares of Netflix have plunged 12.8% year to date, underperforming the Zacks Broadcast Radio and Television industry and the Zacks Consumer Discretionary sector’s decline of 9.4% and 6.7%, respectively.
NFLX’s YTD Share Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Netflix appears overvalued, trading at a forward 12-month price-to-sales ratio of 6.17X, higher than the industry’s 3.17X. NFLX carries a Value Score of D.
NFLX’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NFLX’s 2026 earnings is pegged at $3.59 per share, unchanged over the past 30 days. This indicates a 41.9% increase from the previous year.
NFLX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Netflix ve 2. čtvrtletí zvýšil tržby o 13,37 % na 12,56 miliardy USD a EPS ve výši 0,80 překonal odhady. Akcie jsou za posledních 12 měsíců níže o 33,64 %.
Netflix stock is down more than 30% over the past year while the business keeps growing revenue at double digits, and that disconnect is exactly what has one major billionaire investor stepping back in.
Netflix (NASDAQ:NFLX | NFLX Price Prediction) has been a punching bag for the past year, but our model sees a very different setup heading into 2027. With the stock trading at $81.72, down 33.64% over the last twelve months, sentiment has rarely been this washed out on a company still growing revenue in the double digits.
Our 24/7 Wall St. price target for Netflix is $181.89, implying 122.58% upside over the next twelve months. Our recommendation is buy, with confidence classified as high.
24/7 Wall St. Price Target Summary Metric Value Current Price $81.72 24/7 Wall St. Price Target $181.89 Upside 122.58% Recommendation BUY Confidence Level 90% Why Netflix Sold Off and What Just Changed Netflix stock is down 12.84% year to date and sits about 26% below its 52-week high of $126.71. Shares are up 10.99% over the last month and 2.68% in the past week.
Q2 2026 delivered revenue of $12.56 billion, up 13.37% year over year, with EPS of $0.80 beating consensus. Double-digit growth showed up across every region, led by Latin America at 21%.
Seeking Alpha noted Bill Ackman’s return to Netflix, and a widely upvoted WallStreetBets thread titled “Why the fuck is Netflix down 40% over the past year?” captured retail frustration that often marks capitulation lows.
Why Bulls See a Breakout Ahead The bull thesis rests on three pillars: advertising, pricing, and runway. Netflix is guiding 2026 revenue to $51 billion to $51.4 billion with ad revenue roughly doubling to $3 billion, and free cash flow near $12.5 billion. Advertiser count already grew 70% year over year to over 4,000 clients.
Management flagged the company is only under 45% penetrated into 800 million addressable households globally and captures roughly 5% of global TV view share.
Buybacks are massive: $4.7 billion repurchased in Q2 2026, the largest quarter in company history, with $27.1 billion remaining. If ad monetization scales as guided, the bull case points to $195.83.
Risks Worth Watching The bear case leans on decelerating FX-neutral growth (from 12% in Q2 to 11% guided in Q3), content amortization growing roughly 10%, a $1 billion debt maturity in 2026, and viewership competition from the Winter Olympics and World Cup.
Q2 free cash flow declined 32.73% year over year, but bulls counter this reflects higher cash taxes tied to the Warner Bros. termination fee received in Q1, with core operations still intact. Insider activity trending net selling is worth noting. Our bear case lands at $144.89, still well above the current quote.
How Netflix Compares to Disney and Spotify Disney (NYSE:DIS) trades at a trailing P/E of 15 with an operating margin of 14.6%, versus Netflix at 26 and a Q2 operating margin of 33.4%. Disney is cheaper on paper, but Netflix earns its premium with more than double the operating margin.
Spotify (NYSE:SPOT) trades at a trailing P/E near 51, with Q2 revenue growth of 13.9%. That is nearly identical growth to Netflix, but at almost twice the earnings multiple. Against this pair, our 24/7 Wall St. price target looks reasonable, closer to conservative.
Company Trailing P/E Operating Margin Netflix 26 33.4% Disney 15 14.6% Spotify 51 12.8% Bottom Line on Netflix’s Setup The 24/7 Wall St. price target of $181.89 reflects a stock priced for stagnation and a business still executing. Our model’s recommendation is buy, with high confidence.
The bullish scenario strengthens if the ad tier continues doubling and buybacks keep pace, while the setup weakens if FY26 guidance slips or FCF conversion deteriorates materially. Given 71% bullish analyst coverage and zero sell ratings, the risk/reward is skewed to the upside.
Year 24/7 Wall St. Price Target 2026 $107.69 2027 $203.13 2028 $356.49 2029 $506.13 2030 $633.50 These projections assume Netflix continues executing on advertising growth, pricing power, and buybacks. Significant upside or downside could come from large-scale M&A or a step-change in streaming competition.
Contact [email protected] for any questions or corrections.
Here's an odd pair of facts. Netflix (NFLX +2.35%) has never made more money than it is making right now -- net income over the past four reported quarters totals about $13.65 billion, comfortably above the record $10.98 billion the company earned in all of 2025. And yet the stock has fallen about 35% from its 52-week high of $126.71, trading near $82 as of this writing -- and that's after a bounce from about $72 early this month.
Profits are at an all-time high, and shares down by more than a third.
Is this a buying opportunity?
Image source: The Motley Fool.
The profit record holds upOne qualification first. That trailing profit includes a one-time boost: a $2.8 billion pre-tax termination fee (roughly $2.3 billion after tax) that Netflix collected in the first quarter, when its agreement to buy Warner Bros. Discovery's studios and streaming business ended, after Warner Bros. Discovery accepted a rival's higher offer. That money counts, but it won't repeat.
Set it aside, and the record still stands on the operating line. Netflix's operating income over the past four quarters totals about $14.4 billion, ahead of the $13.3 billion it generated in all of 2025.
And the operating trend is still improving. Second-quarter operating income rose 11% year over year to $4.2 billion, and management continues to forecast a 31.5% operating margin for 2026, expanding from 29.5% last year. The company's own outlook implies operating income growth of more than 20% this year.
In other words, whatever the market is worried about, it isn't the profit engine. That part keeps getting better.
The growth rate did changeWhat changed is the top line's speed. Netflix's year-over-year revenue growth peaked at 17.6% in the fourth quarter of 2025. It slowed to 16.2% in the first quarter of this year, then to 13.4% in the second. For the third quarter, management forecasts 11.7% growth (a clear deceleration, even if a gradual one).
For the full year, management's revenue outlook of $51.0 billion to $51.4 billion implies 13% to 14% growth for 2026, with advertising revenue -- roughly doubling to about $3 billion -- doing part of the work.
That's still healthy growth for a company this size. But it's a different trajectory than the one investors were paying for at the high. At $126.71, the stock traded at about 50 times its 2025 earnings of $2.53 per share -- a price-to-earnings multiple that only made sense if mid-to-high-teens revenue growth kept compounding for years to come. By the time management's slower-growth outlook was on the table, the market had cut that price-to-earnings multiple by more than a third, measured on earnings adjusted for the one-time fee.
Today, the stock's price-to-earnings ratio is about 25 as reported, or about 31 with the fee stripped out, and shares trade at about 21 times expected 2027 earnings. Same company, record profits, a much smaller price tag per dollar of earnings.
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Overall, I do think the sell-off that got shares to where they are today was justified. But I also don't think shares are cheap enough to make them a buy.
A multiple of 50 times earnings was pricing Netflix for a growth era that management itself says is moderating. The repricing since then isn't the market malfunctioning. It's the market updating its view to reflect a maturing business.
Now shares arguably look priced about right, trading about 21 times expected 2027 earnings. That's a reasonable price tag for a business forecasting 20%-plus operating income growth with advertising revenue on track to double. Additionally, Netflix remains arguably the best-positioned company in streaming.
Still, I think shares are priced more like a hold than a buy here. After all, growth could decelerate further in 2027 (management hasn't guided that far out), and competition for viewing time isn't letting up.
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Amy Reinhard, Netflix's advertising president. Katie Jones/Variety via Getty Images Netflix is shaking up its ads leadership.
Jon Whitticom, a prominent Netflix exec who helped build the streamer's advertising business, is leaving the organization, according to a memo viewed by Business Insider.
Advertising president Amy Reinhard shared the news with staff last week, saying she had "decided to part ways" with Whitticom. She added that ads product exec Marc Heneghan would lead the unit on an interim basis while a search is conducted for Whitticom's replacement.
"At Netflix, we expect our leaders to build and maintain trust, share context generously, collaborate cross-functionally, and cultivate an environment where people can do their best work," she wrote. "Jon and I have discussed these needs directly over time, and my decision reflects this standard now and going forward."
The ads business is one of the key levers Netflix is leaning on for growth, along with live sports and creator content, as Wall Street worries about the streamer's US engagement growth slowing. The company said this year that in countries where it offers an ads tier, more than 60% of new subscribers choose its cheaper, ad-supported plan.
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Whitticom, Netflix's VP of ads product, started as an ad platform advisor in early 2023. His appointment was closely watched because of its potential to help Netflix decide how to level up its then-nascent advertising business. He previously was chief product officer at Comcast-owned ad startup FreeWheel.
Under Whitticom, Netflix built out its ad tech and enabled advertisers to buy its ads through other companies like Google, The Trade Desk, and Magnite. The buildout has also had bumps along the way, with multiple leadership changes and competing internal visions over how to grow the business.
"Speed got us from zero to one," Reinhard wrote in her memo. "Getting to what's next means knowing when to move fast and how to do it together."
Netflix has said it expects to hit $3 billion in ad revenue this year, nearly doubling its 2025 haul. The company is also introducing new ad formats and expanded ways for advertisers to buy inventory, Reinhard said in an announcement concluding its Upfront sales process, where TV companies pitch big advertisers for extensive ad deals.
Here's the full memo from Reinhard:
Team,I wanted to let you know about a leadership change I'm making to better reflect the needs of the business and the growth ahead in Ads.After careful consideration, I've decided to part ways with Jon Whitticom, and today will be his last day. Jon helped build Ads Product from the ground up and led the launch of the Netflix Ads Suite last year, a major milestone for our business and Netflix. I'm grateful for all his contributions over the past two-plus years.At Netflix, we expect our leaders to build and maintain trust, share context generously, collaborate cross-functionally, and cultivate an environment where people can do their best work. Jon and I have discussed these needs directly over time, and my decision reflects this standard now and going forward. Speed got us from zero to one. Getting to what's next means knowing when to move fast and how to do it together.Marc Heneghan will lead Ads Product on an interim basis while I immediately begin an external search for a new leader. All of Jon's directs will now report to Marc.There's never a good moment for a change like this; I know it often carries risk and disruption. But I also know this team is resilient and our foundation is strong. What isn't changing are our priorities as a business, or my confidence in this team's ability to stay focused on the bigger picture and maintain our momentum on our near-term deliverables.I will host separate sessions with the Ads Product team and the Ads Platform teams to talk through our path forward and answer any questions. Those teams should look out for a calendar invite to join a session.Please join me in thanking Jon and wishing him the best in the future.Best,Amy
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Lucia Moses You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Lucia Moses covers the media and entertainment business, with a focus on how creators build businesses, how media companies intersect with creators, and how marketers adopt entertainment tools. She's broken stories about MrBeast's ambitions, Google's movie initiative, and Netflix's push into podcasts.She previously reported on media and managed teams at Digiday and Adweek.
The streamer is discussing bringing rival services onto its platform.
08/24/2026 12:28
Summary
Netflix has reportedly held talks about offering Peacock and Fox One.
Netflix Inc. (NFLX, Financials) may reconsider a streaming strategy rule. According to The New York Times, the business has considered adding Comcast's Peacock and Fox One to its platform. Netflix may integrate competing content or offer memberships, but no deal is imminent.
Nonetheless, the talks are notable. Netflix rarely sells competitive streaming services. In contrast, Amazon, Roku, and YouTube sell third-party subscriptions to become users' major gateways. That model is growing.
Antenna believes that one-third of new streaming subscriptions have come from third-party services, up 60% over the past three years. Netflix has tried several things. It added live and on-demand TF1 programming in June.
The appeal is straightforward. Netflix could increase engagement and solidify its position as the default streaming destination if it allowed consumers to manage other subscriptions and watch its own series.
Partners may share revenue and lose client control. Netflix must decide if being the biggest streaming service is enough or if it wants to be the streaming front door.
Disclosures
I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Netflix roste díky snaze o širší streamingová partnerství a posilování nabídky pro tvůrce, zatímco čelí tlaku na zdražování předplatného. Akcie byly v pondělí výše o 0,74 % na 80,18 USD.
Netflix Inc (NASDAQ:NFLX) stock traded higher by almost a percent on Monday as buyers lean into relative strength in Communication Services even while the broader tape stays risk-off.
The Nasdaq is down 1.14% while the S&P 500 has shed 0.40%.
The streaming giant is expanding its streaming strategy as it explores third-party partnerships, faces growing limits on subscription price increases and intensifies its battle with Alphabet Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) YouTube for top creators and younger viewers.
• Netflix stock is trading at depressed levels. What’s next for NFLX stock?
Netflix Explores Broader Streaming Partnerships as Competition IntensifiesNetflix executives have discussed bringing third-party streaming services such as Peacock and Fox One into the Netflix app, although no deal is imminent.
Co-CEO Greg Peters said the company is seeing "promising" results from its TF1 partnership in France and would consider similar arrangements if they benefit Netflix, its members and partners, the New York Times reported on Monday.
Pricing Pressure Tests Subscriber LimitsNetflix and other major streamers have raised subscription prices sharply in Western Europe, although Ampere Analysis senior research manager Jaanika Juntson said the size of price increases is falling as consumers approach their willingness-to-pay limits, the Guardian reported on Monday.
Netflix U.K. revenue reached 2.06 billion pounds ($2,808,624,929) last year, up 11%, while pre-tax profit rose to 72.5 million pounds ($98,847,236).
YouTube Pushes Back Against Netflix’s Creator StrategyNetflix is also pursuing popular YouTube creators to attract younger audiences and increase viewing time. In response, YouTube has discussed paying major channels for temporary exclusivity and reducing marketing support for creators who simultaneously distribute content on Netflix, highlighting intensifying competition between the two platforms, Bloomberg reported on Thursday.
Top ETF Exposure State Street Communication Services Select Sector SPDR ETF (NYSE:XLC): 4.52% Weight REX FANG & Innovation Equity Premium Income ETF (NASDAQ:FEPI): 6.68% Weight Monarch Blue Chips Core Index ETF (BATS:MBCE): 4.54% Weight Significance: Because Netflix carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
NFLX Price ActionNetflix shares were up 0.74% at $80.18 at the time of publication on Monday, according to Benzinga Pro data.
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The global streamer has posted £2.06B ($2.81B) revenues for full-year 2025, meaning it generated more cash than the country’s leading commercial broadcaster, ITV, and is well ahead of smaller PSB rivals Channel 4 (£1B) and Paramount-owned 5 (£318M). The BBC‘s is funded by the licence fee and does not account in a comparable way.
Netflix’s revenue grew 11.3% from the £1.85B posted in 2024, according to a Companies House filing, with the growth pegged primarily to 7% growth in the average number of paying customers and “higher average monthly revenue” per paying member.
The 2025 figure compares with the £1.9B ITV’s media and entertainment made in its latest full-year results. The division, which houses ITV’s channel suite and streamer ITVX, is being sold to Sky. When production wing ITV Studios is added in, ITV plc posted revenues of £4.12B.
Netflix UK‘s operating profit for the financial year ended December 31, 2025, was £44.9M, up slightly on the £43.2M the year before, with profit after tax coming in at £53.3M, up 11.5%.
The news will surely be a big talking point at the final Edinburgh Television Festival this week in the Scottish capital, where Netflix and the UK’s other major streamers and broadcasters will take to stage to talk to the industry. Netflix UK’s Doc Series boss, Adam Hawkins, is the fest’s advisory chair this year.
Netflix launched in the UK in 2012 as part of its first expansion into Europe, and has since grown into one of the dominating forces in British broadcasting through shows such as Baby Reindeer, The Gentlemen and Adolescence.
With the BBC’s licence fee model in crisis, the idea of forcing streamers to support the UK’s leading public broadcaster in collecting its funding. The Motion Picture Association, which represents Netflix and the U.S. studios, has slammed the idea and even BBC Director General Matt Brittin has admitted the plan would be “difficult” to enforce.
Earlier this year, regulator Ofcom’s Media Nations report revealed Netflix was ahead of the BBC, ITV and YouTube as the service viewers first thought of when deciding what to watch. The number of 16-24s choosing the streamer first was further ahead of rivals.
The filing to Companies House showed that Netflix Services UK Limited, the company Netflix uses to house its earnings in Britain, distributed interim dividends of £30M on July 21, 2025. It also increased the amount loaned from Netflix to nearly £400M, with an extended maturity date of August 1, 2028, and became a subsidiary of Amsterdam-based Netflix International, which merged with Netflix Services Holdings in May last year.
According to the filing, Netflix employed an average of 342 staff in the UK in 2025, up from 263 the year before.
Netflix uvedl tržby za 2Q 2026 ve výši 12,56 miliardy USD, meziročně o 13,37 % více, a EPS 0,80 USD překonal konsensus. Společnost zároveň potvrdila celoroční výhled tržeb 51 až 51,4 miliardy USD.
Netflix (NASDAQ:NFLX | NFLX Price Prediction) has been one of 2026’s most punished megacaps, and the setup is starting to look asymmetric. With shares at $80.44 and free cash flow guidance of roughly $12.5 billion for the year, our proprietary model calls for sharp mean reversion.
Our 24/7 Wall St. price target for Netflix is $177.34, implying 121% upside over the next 12 months. Our recommendation is buy with high model confidence.
24/7 Wall St. Price Target Summary Metric Value Current Price $80.44 24/7 Wall St. Price Target $177.34 Upside +121.0% Recommendation BUY Confidence Level 90% How a Streaming Leader Ended Up in the Bargain Bin Netflix lost roughly a third of its value over the past year, down 33.93% from $121.42 a year ago and 14.44% lower year to date. Shares have stabilized, gaining 18.67% in the past month off a 52-week low of $65.08.
Q2 2026 delivered revenue of $12.56 billion up 13.37% and EPS of $0.80 beating the $0.7883 consensus. Management guided full-year revenue to $51 to $51.4 billion with a 31.5% operating margin target. The stock was punished more for engagement-data disclosure changes than any operational miss.
Why Bulls See a Breakout Ahead Netflix’s addressable market is enormous relative to current penetration. CFO Spence Neumann said Netflix reaches an audience “approaching a billion people” while capturing just 7% of a $670 billion addressable revenue market and 5% of global TV view share.
Advertising revenue is on pace to roughly double to $3 billion in 2026, with advertiser count up 70% year over year. Buybacks are aggressive, with $4.7 billion repurchased in Q2 (a company record) and $27.1 billion remaining under authorization. Our bull case models to $191.03.
What Could Go Wrong The bear case is a valuation reset. Q2 free cash flow declined 32.73% to $1.53 billion, and Q1 EPS missed by 8.55%. Bulls counter that FCF decline reflects higher cash taxes tied to the $2.80 billion Warner Bros. termination fee and front-loaded content amortization, with underlying economics intact.
Competition from Alphabet, Amazon, Disney, and TikTok remains structural, and $1 billion of debt matures later this year. Reddit’s composite sentiment is bearish at 38, and insider activity is net selling. Our bear case still lands at $141.71, well above spot.
How Netflix Compares to Disney and Spotify Walt Disney (NYSE:DIS) is the direct streaming rival. Disney trades at a P/E of 15 with operating margin of 14.6%, versus Netflix’s 33.4%. Disney is cheaper on earnings, but Netflix earns roughly double the margin and delivers 42.76% ROE against Disney’s 11.78%. That gap justifies a premium multiple.
Spotify (NYSE:SPOT) is the closest pure-play subscription comp. Spotify trades at P/E near 50 with operating margin of 12.8%, roughly double Netflix’s multiple on materially thinner profitability. If Spotify deserves that multiple on subscription growth, Netflix at 24 times forward earnings looks conservatively priced. The peer set makes our $177.34 target look reasonable.
Company P/E Operating Margin Netflix 24 33.4% Disney 15 14.6% Spotify 50 12.8% Buy the Reset Reiterating the 24/7 Wall St. price target of $177.34, a buy rating, and 90% model confidence. A business generating $12.5 billion of free cash flow with expanding margins should not trade at 25 times forward earnings for long.
The bull thesis holds if ad revenue continues tracking to double this year. The setup weakens if content amortization growth reaccelerates into 2027.
Year 24/7 Wall St. Price Target 2026 $105.84 2027 $175.30 2028 $318.93 2029 $467.36 2030 $600.43 These projections assume Netflix executes on advertising, live programming, and gaming while sustaining pricing power. Meaningful downside could result from subscriber saturation in developed markets or a competitive shock from a well-funded rival.
Contact [email protected] for any questions or corrections.
Netflix míří letos na zhruba 3 miliardy USD z reklamních příjmů, což je asi dvojnásobek proti loňsku. U amerického upfrontu téměř zdvojnásobil reklamní závazky.
Key Takeaways Netflix is targeting roughly $3 billion in ad revenues, about double the prior year's figure.Netflix nearly doubled U.S. upfront ad commitments, with FIFA Women's World Cup sponsorships sold out.Expanded programmatic tools and a low-cost ad tier are widening Netflix's monetizable advertising base. Netflix (NFLX - Free Report) continues to sharpen its advertising business as a driver of revenue expansion, remaining on track to deliver approximately $3 billion in ad revenues this year, roughly double the prior year figure. The gap between average revenue per membership on the ad-supported tier and the standard ad-free plan continues to narrow. This gap represents a direct opportunity for incremental revenues as advertising capabilities mature.
Netflix is expanding its demand sources. The company continues to build out its proprietary Netflix Ads Suite and broader programmatic capabilities. In the second quarter of 2026, it expanded its AI-powered tools across the full advertising lifecycle, spanning planning, creative production, campaign management and reporting. Netflix is also extending programmatic access to Pause Ads and live inventory, widening participation from smaller advertisers.
Accessibility is reinforcing this growth path. Netflix's ad-supported plan in the United States is priced at $8.99, functioning as a low-cost entry point that continues to draw new members into the ecosystem while widening the base against which advertising inventory can be monetized.
Live programming is reinforcing advertiser demand. Netflix closed its 2026 U.S. upfront in August, nearly doubling ad commitments from the prior year. Game sponsorships for the 2027 FIFA Women's World Cup are fully sold out, with in-game inventory nearly exhausted as well. Advertisers are also showing strong interest in NFL, WWE and MLB programming.
NFLX is guiding 13% to 14% revenue growth for 2026, with advertising expected to complement subscription growth from memberships and pricing. As ad tech investment and live event demand continue to build, Netflix's advertising business is positioning itself to become an increasingly material contributor to overall revenue expansion.
How NFLX is Placed Against PeersNetflix's advertising push mirrors similar strategies at Disney (DIS - Free Report) and Warner Bros. Discovery (WBD - Free Report) . Disney is leaning on its ad-supported reach across Disney+, Hulu and ESPN+ to strengthen streaming profitability, while Warner Bros. Discovery is expanding ad-tier distribution across its Max platform to support margin gains.
Both Disney and Warner Bros. Discovery are treating advertising as a central lever for improving per-user economics, an approach broadly consistent with Netflix's own strategy. However, Netflix's expansive live sports slate and upfront momentum position it to build advertiser demand at a pace that compares favorably against both Disney and Warner Bros. Discovery going forward.
NFLX’s Price Performance, Valuation & EstimatesShares of Netflix have declined 17.1% year to date, underperforming both the Zacks Broadcast Radio and Television industry and the Zacks Consumer Discretionary sector’s fall of 13.7% and 7.6%, respectively.
NFLX’s YTD Share Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Netflix appears overvalued, trading at a forward 12-month price-to-earnings ratio of 20.77X, higher than the sector’s 16.42X. NFLX carries a Value Score of D.
NFLX’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NFLX’s 2026 earnings is pegged at $3.59 per share, down by a penny over the past 30 days. This indicates a 41.9% increase from the previous year.
NFLX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Akcie Netflixu vzrostly v úterý v poledním obchodování o 4 % poté, co Pershing Square Billa Ackmana oznámila novou pozici. Akcie jsou ale letos stále o 16 % níže.
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Netflix (NASDAQ:NFLX | NFLX Price Prediction) shares are up 4% to $78.80 in Tuesday midday trading after Bill Ackman’s Pershing Square disclosed a new position in the streaming company. The catalyst stands out because Netflix stock is climbing well ahead of its closest streaming peers on the day.
Shares are still down 16% year to date (YTD) through Monday’s close, and the stock has fallen 37% over the past year. The rally partially offsets that decline. What makes the trade notable is that Ackman previously owned this same name in 2022 and exited at a loss.
Ackman’s Pershing Square Rebuilds a Netflix Position In its Q2 2026 investor letter, Pershing Square laid out its Netflix thesis directly. Ackman has separately stated that Netflix has “won the streaming wars”:
We acquired a position in Netflix, a business we briefly owned in 2022 and have followed closely ever since. Netflix is the dominant global streaming platform with over 325 million subscribers, nearly double the combined base of its two closest competitors, Disney+ and HBO Max. When we first invested in early 2022, investors feared an escalating content arms race among a crowded field of streaming entrants. At the same time, cash content spend substantially exceeded content amortization, weighing on free cash flow. The launch of a previously disavowed advertising tier added further uncertainty.
Pershing Square filed under Schedule 13G on August 14, days before the news catalyzed Tuesday’s move. That filing carries a passive intent designation, though the 2022 attempt ended in a loss, which sits in tension with the current re-entry.
Streaming Peers Barely Move Disney (NYSE:DIS) stock is up 0.9% to $104.51 on Tuesday. The parent runs Disney+ and Hulu alongside ESPN and its Experiences theme park and cruise business, and Disney stock is down 8% YTD through Monday’s close.
Warner Bros. Discovery (NASDAQ:WBD) shares are up 0.4% to $28.04. The company operates HBO Max and discovery+ alongside its Studios and Global Linear Networks segments, and WBD stock is down 3% YTD through Monday’s close.
Both are the specific competitors Ackman’s letter names, which is why their near-flat trading is the point. Investors are treating this as news about Netflix’s shareholder register, not the competitive balance in streaming.
Sector ETF Signal Communication Services Select Sector SPDR Fund (NYSEARCA:XLC) shares are up 0.3% to $111.18. Netflix is a constituent of the fund, and the near-flat print against Netflix’s gain shows how a single holding’s move dilutes across the basket. The ETF is not leveraged, and it concentrates in a handful of large communication names, which further muffles idiosyncratic moves.
The fund is down 5% YTD through Monday’s close. That trajectory sits closer to Disney’s and Warner Bros. Discovery’s than to Netflix’s, which confirms the sector did not reprice on Tuesday.
Valuation and Analyst Picture Netflix stock carries a trailing P/E ratio of 28.83x on a market capitalization of roughly $328.1 billion. Disney stock trades at 14.41x, so the bull case here leans on dominance rather than cheapness. That gap is the counterweight to any thesis built on a cheap starting multiple.
Sell-side coverage runs strongly positive. On a 1-to-5 scale, Netflix stock has an average brokerage recommendation of 1.63 from 50 firms, between Strong Buy and Buy. Zacks assigns a Rank of 3, or Hold, with the current-year consensus earnings estimate unchanged at $3.59 over the past month.
The streamer operates in more than 190 countries approaching 1 billion members, produces originals in more than 50 countries, and has expanded into live NFL games, boxing, MLB events and WWE programming. Some 144 hedge fund portfolios held Netflix at the end of Q1 2026, down from 146 the prior quarter.
What to Watch Next The open questions center on whether Netflix’s ad-tier revenue scales, whether subscriber growth stabilizes, and whether estimate revisions turn higher. Pershing Square’s first attempt at this trade ended in a loss in 2022, which sits in tension with Ackman’s dominance argument.
Investors could look for signs that ad-tier monetization is accelerating alongside membership additions. Traders may want to keep an eye on whether Netflix stock holds above recent levels into the next round of estimate revisions.
Contact [email protected] for any questions or corrections.
Netflix v pondělí oslabil o 2,14 % na 76,49 USD, protože trh dál tlačí slabší výhled pro 3. čtvrtletí i celý rok. Tržby za 3. čtvrtletí mají činit 12,86 miliardy USD, což je pod odhadem Wall Street 13,01 miliardy USD.
Netflix Inc. (NASDAQ:NFLX) stock traded lower on Monday as structural headwinds from its second-quarter guidance continued to depress the share price. The decline comes despite a brief lift last Thursday following disclosures from Pershing Square Capital Management.
The Nasdaq is up 0.14% while the S&P 500 has shed 0.15% and Communication Services is down 0.7%.
• Netflix stock is facing resistance. Why is NFLX stock retreating?
Pershing Square Discloses New PositionBillionaire investor Bill Ackman re-entered Netflix, acquiring 3.15 million shares. The new position makes up 4.9% of Pershing Square’s portfolio. Ackman previously exited Netflix in 2022 with a $400 million loss after purchasing over $1 billion in stock at $400 per share and selling at $225 per share.
Pershing Square stated that “Netflix has since effectively won the streaming wars” and noted the stock’s “current valuation multiple represents a substantial discount.”
Second-Quarter Revenue Misses EstimatesOn July 16, Netflix reported second-quarter revenue of $12.56 billion, missing the Street consensus estimate of $12.59 billion despite rising 13% year-over-year. UCAN revenue hit $5.43 billion (+10%), EMEA reached $4.03 billion (+14%), LATAM generated $1.58 billion (+21%) and APAC totaled $1.51 billion (+16%).
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Earnings per share came in at 80 cents, beating the Street estimate of 79 cents. View hours grew 2% year-over-year in the first half of 2026. Live programming accounted for 5% of 2026 content spend and 1% of view hours, while ad-related revenue remains on track to top $3 billion for 2026.
Soft Guidance Triggers PressureMarket sentiment remains tied to conservative forward guidance. Netflix projects third-quarter revenue of $12.86 billion (12% year-over-year growth), falling below Street estimates of $13.01 billion.
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Expected third-quarter earnings of 82 cents per share also lag behind the Street consensus of 84 cents. Additionally, Netflix narrowed its full-year revenue outlook to $51 billion–$51.40 billion from $50.70 billion–$51.70 billion, compared to the Street estimate of $51.41 billion.
NetFlix Technical Levels to WatchFrom a trend perspective, Netflix is trying to stabilize in the short term, trading above its 20-day SMA ($73.25) and 50-day SMA ($74.75), but it remains 7.9% below its 100-day SMA ($83.54) and 13.6% below its 200-day SMA ($89.04). That "short-term bounce inside a longer-term downtrend" setup often creates choppy tape, especially with the 20-day SMA still below the 50-day SMA (a bearish alignment).
Key Resistance: $78.50 Key Support: $71 NFLX Stock Price Activity: Netflix shares were down 2.14% at $76.49 at the time of publication on Monday, according to Benzinga Pro data.
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Avalon Trust Co bought a new position in shares of Netflix, Inc. (NASDAQ:NFLX – Free Report) during the second quarter, according to its most recent filing with the Securities & Exchange Commission. The institutional investor bought 264,958 shares of the Internet television network’s stock, valued at approximately $18,918,000. Netflix makes up 1.2% of Avalon Trust Co’s investment portfolio, making the stock its 25th largest position.
Several other hedge funds have also modified their holdings of the stock. Vanguard Group Inc. lifted its holdings in Netflix by 912.5% in the fourth quarter. Vanguard Group Inc. now owns 390,014,981 shares of the Internet television network’s stock valued at $36,567,805,000 after buying an additional 351,493,659 shares during the period. State Street Corp grew its holdings in Netflix by 927.6% during the 4th quarter. State Street Corp now owns 176,780,995 shares of the Internet television network’s stock worth $16,574,986,000 after acquiring an additional 159,578,053 shares during the period. Geode Capital Management LLC grew its holdings in Netflix by 892.0% during the 4th quarter. Geode Capital Management LLC now owns 99,598,678 shares of the Internet television network’s stock worth $9,305,336,000 after acquiring an additional 89,558,684 shares during the period. Capital World Investors raised its position in shares of Netflix by 859.1% during the 4th quarter. Capital World Investors now owns 89,341,444 shares of the Internet television network’s stock valued at $8,376,656,000 after acquiring an additional 80,025,890 shares during the last quarter. Finally, Price T Rowe Associates Inc. MD lifted its stake in shares of Netflix by 685.8% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 86,058,878 shares of the Internet television network’s stock valued at $8,068,882,000 after purchasing an additional 75,107,069 shares during the period. 80.93% of the stock is owned by institutional investors.
Analyst Ratings Changes
Several research firms have recently issued reports on NFLX. Sanford C. Bernstein set a $95.00 price target on Netflix and gave the stock an “outperform” rating in a research report on Friday, July 17th. Pivotal Research cut their target price on Netflix from $96.00 to $70.00 and set a “hold” rating on the stock in a research note on Friday, July 17th. Barclays reduced their target price on Netflix from $85.00 to $80.00 and set an “equal weight” rating on the stock in a report on Friday, July 17th. Raymond James Financial restated a “market perform” rating on shares of Netflix in a research report on Thursday, May 14th. Finally, Morgan Stanley reaffirmed an “overweight” rating and issued a $90.00 price target (down from $115.00) on shares of Netflix in a research note on Tuesday, July 14th. Four equities research analysts have rated the stock with a Strong Buy rating, thirty-four have assigned a Buy rating, sixteen have issued a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, Netflix currently has a consensus rating of “Moderate Buy” and a consensus price target of $103.48.
Read Our Latest Stock Analysis on Netflix
Netflix Stock Performance
Shares of Netflix stock opened at $78.16 on Friday. The stock’s fifty day simple moving average is $74.67 and its 200 day simple moving average is $84.54. The company has a current ratio of 1.14, a quick ratio of 1.14 and a debt-to-equity ratio of 0.39. The company has a market capitalization of $325.45 billion, a PE ratio of 24.60, a PEG ratio of 0.98 and a beta of 1.52. Netflix, Inc. has a 12 month low of $65.08 and a 12 month high of $126.71.
Netflix (NASDAQ:NFLX – Get Free Report) last posted its earnings results on Thursday, July 16th. The Internet television network reported $0.80 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.79 by $0.01. The firm had revenue of $12.56 billion during the quarter, compared to analysts’ expectations of $12.58 billion. Netflix had a return on equity of 40.02% and a net margin of 28.22%.The company’s revenue was up 13.4% on a year-over-year basis. During the same period in the previous year, the firm earned $0.72 earnings per share. On average, research analysts predict that Netflix, Inc. will post 3.59 EPS for the current year.
Insiders Place Their Bets
In related news, CEO Theodore A. Sarandos sold 105,850 shares of the stock in a transaction that occurred on Monday, August 3rd. The stock was sold at an average price of $73.03, for a total transaction of $7,730,225.50. Following the completion of the sale, the chief executive officer directly owned 206,266 shares of the company’s stock, valued at approximately $15,063,605.98. This represents a 33.91% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Spencer Adam Neumann sold 9,248 shares of the firm’s stock in a transaction that occurred on Monday, August 10th. The stock was sold at an average price of $75.79, for a total transaction of $700,905.92. Following the sale, the chief financial officer owned 73,787 shares in the company, valued at $5,592,316.73. This trade represents a 11.14% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 600,295 shares of company stock worth $49,056,671 in the last three months. 1.24% of the stock is owned by corporate insiders.
Key Stories Impacting Netflix
Here are the key news stories impacting Netflix this week:
Positive Sentiment: Bill Ackman’s Pershing Square disclosed a new Netflix position of approximately 3.15 million shares, representing about 4.9% of the fund’s portfolio. Ackman said Netflix has effectively “won the streaming wars,” renewing investor interest after the stock’s major sell-off. Reuters article
Positive Sentiment: Analysts and investing commentators point to Netflix’s resilient fundamentals: second-quarter revenue rose 13.4% year over year to $12.6 billion, earnings per share slightly exceeded estimates, and profitability remained strong. The advertising business, expanding margins and a valuation viewed as reasonable relative to growth are supporting the bullish case. Zacks article
Positive Sentiment: Netflix’s continued push into live sports—including an MLB “Field of Dreams” game—and the extension of its Seinfeld agreement could strengthen engagement, advertising opportunities and content retention. MLB live sports article
Neutral Sentiment: Institutional positioning is mixed: some large investors added shares while others reduced holdings. Analysts’ reported price targets remain above the current market level, but investors still must weigh valuation and slowing growth expectations.
Negative Sentiment: Netflix closed its Hollywood-based Night School gaming studio and plans to close Helsinki-based Moonloot. The closures may improve focus and reduce costs, but they also raise questions about the company’s gaming strategy and ability to expand beyond streaming. Los Angeles Times article
Negative Sentiment: Reported insider trading shows 30 Netflix open-market sales and no purchases over the past six months. While such sales may reflect compensation or diversification, the one-sided pattern can weigh on sentiment and contrasts with Ackman’s new bullish position. Quiver Quantitative article
Netflix Company Profile
(Free Report)
Netflix, Inc (NASDAQ: NFLX) is a global entertainment company that provides subscription-based streaming of films, television series, documentaries and other video content. Founded in 1997 by Reed Hastings and Marc Randolph and headquartered in Los Gatos, California, the company began as a DVD-by-mail rental service and introduced streaming video in 2007. Netflix later expanded into producing and distributing original programming, beginning notable original hits in the 2010s, and now operates a content production and distribution ecosystem alongside its licensing activity.
The company’s primary product is its on-demand streaming service, which can be accessed on a wide range of internet-connected devices and delivered through a suite of apps and web platforms.
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Netflix stále roste: ve čtvrtletí výnosy stouply o 13 % na 12,6 miliardy USD. Akcie jsou ale asi 38 % pod 52týdenním maximem kvůli vyšším očekáváním investorů.
Netflix (NFLX -0.10%) has become one of the more interesting stocks in the market right now. Its shares have fallen sharply from their highs, leaving many investors wondering whether something has gone seriously wrong with the business.
But here's the surprising part: Netflix's business is still growing. In its latest quarter, Netflix generated $12.6 billion of revenue, up 13% year over year . So why has the stock fallen so much?
The answer is more complicated than a "weak" quarter.
Image source: Getty Images.
Netflix became a victim of its own success. For years, Netflix was one of the market's favorite growth stocks.
The company transformed entertainment, expanded globally, and built a streaming platform with hundreds of millions of members. Investors rewarded that success with a premium valuation because they expected Netflix to keep growing rapidly for years.
But Netflix is no longer the same company it was a decade ago. It already operates at an enormous scale -- more than 300 million subscribers. Adding another 100 million members becomes increasingly difficult when the company already serves a massive global audience.
That doesn't mean Netflix has stopped growing. Its Q2 results prove otherwise. The issue is that investors have started asking a different question: How much growth is realistically left?
That question matters because a stock price reflects expectations about the future, not just today's results. A company can grow its profits and still see its stock fall if investors decide those profits are worth a lower price.
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The business is healthy, but the bar is higher. Netflix's latest numbers make it difficult to argue that the underlying business is in trouble.
Revenue increased 13% year over year in Q2, while operating income increased 11%. More importantly, management expects operating income to grow by more than 20% in 2026, with the operating margin reaching 31.5%, up from 29.5% in 2025.
Engagement also remains healthy. Netflix said members watched more than 97 billion hours during the first half of 2026, up 2% from the same period last year, despite competition from major events such as the Winter Olympics and the World Cup.
That is hardly a broken business. But investors now expect Netflix to do more than simply grow.
The company needs to show that it can continue raising prices without hurting engagement, expand margins, and create new revenue streams from its enormous audience.
That brings us to advertising.
Advertising could determine what happens next. Netflix's advertising business has become increasingly important to the investment story.
Management expects advertising revenue to roughly double in 2026 to about $3 billion. That would still represent only a small portion of Netflix's overall revenue, but the opportunity is set to grow much larger over time.
The company is expanding its advertising technology, improving targeting and measurement, and opening more of its inventory to programmatic buyers. If Netflix succeeds, advertising could give the company a powerful new way to monetize its existing audience.
That matters because Netflix no longer needs to rely entirely on adding subscribers. It can raise prices. It can increase advertising revenue. It can improve margins. The more money Netflix earns per member, the less explosive subscriber growth it needs to generate strong earnings growth.
What does it mean for investors? Netflix stock has fallen sharply, trading down about 38% from its 52-week high, but investors should be careful not to confuse a falling stock price with a deteriorating business.
The latest numbers tell a different story. Netflix is still growing. Profitability remains strong. Engagement is healthy. Advertising is gaining momentum.
The real issue is a change in investors' expectations. Investors once paid a premium for Netflix because they believed exceptional growth would continue for years. Today, they are demanding more proof that Netflix can maintain strong growth at its enormous scale.
That makes the next phase particularly important. If Netflix can sustain double-digit revenue growth, expand margins, and turn advertising into a meaningful profit engine, the recent sell-off could eventually look more like a valuation reset than a fundamental breakdown.
But if growth slows materially and advertising fails to meet expectations, the market's caution may prove justified.
All that said, investors should pay attention to execution in the coming quarters.
BIP Wealth LLC purchased a new stake in shares of Netflix, Inc. (NASDAQ:NFLX – Free Report) during the 2nd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The institutional investor purchased 20,759 shares of the Internet television network’s stock, valued at approximately $1,482,000.
Several other institutional investors have also recently added to or reduced their stakes in the business. Vanguard Group Inc. lifted its stake in Netflix by 912.5% in the fourth quarter. Vanguard Group Inc. now owns 390,014,981 shares of the Internet television network’s stock valued at $36,567,805,000 after buying an additional 351,493,659 shares during the last quarter. State Street Corp raised its holdings in shares of Netflix by 927.6% during the fourth quarter. State Street Corp now owns 176,780,995 shares of the Internet television network’s stock valued at $16,574,986,000 after buying an additional 159,578,053 shares during the last quarter. Geode Capital Management LLC boosted its position in shares of Netflix by 892.0% during the fourth quarter. Geode Capital Management LLC now owns 99,598,678 shares of the Internet television network’s stock worth $9,305,336,000 after buying an additional 89,558,684 shares during the period. Capital World Investors grew its holdings in Netflix by 859.1% in the 4th quarter. Capital World Investors now owns 89,341,444 shares of the Internet television network’s stock worth $8,376,656,000 after buying an additional 80,025,890 shares in the last quarter. Finally, Morgan Stanley increased its position in Netflix by 903.0% in the 4th quarter. Morgan Stanley now owns 85,349,973 shares of the Internet television network’s stock valued at $8,002,414,000 after acquiring an additional 76,840,318 shares during the period. Institutional investors own 80.93% of the company’s stock.
Key Headlines Impacting Netflix
Here are the key news stories impacting Netflix this week:
Positive Sentiment: Bill Ackman’s Pershing Square disclosed a new Netflix position of approximately 3.15 million shares, representing about 4.9% of the fund’s portfolio. Ackman said Netflix has effectively “won the streaming wars,” renewing investor interest after the stock’s major sell-off. Reuters article
Positive Sentiment: Analysts and investing commentators point to Netflix’s resilient fundamentals: second-quarter revenue rose 13.4% year over year to $12.6 billion, earnings per share slightly exceeded estimates, and profitability remained strong. The advertising business, expanding margins and a valuation viewed as reasonable relative to growth are supporting the bullish case. Zacks article
Positive Sentiment: Netflix’s continued push into live sports—including an MLB “Field of Dreams” game—and the extension of its Seinfeld agreement could strengthen engagement, advertising opportunities and content retention. MLB live sports article
Neutral Sentiment: Institutional positioning is mixed: some large investors added shares while others reduced holdings. Analysts’ reported price targets remain above the current market level, but investors still must weigh valuation and slowing growth expectations.
Negative Sentiment: Netflix closed its Hollywood-based Night School gaming studio and plans to close Helsinki-based Moonloot. The closures may improve focus and reduce costs, but they also raise questions about the company’s gaming strategy and ability to expand beyond streaming. Los Angeles Times article
Negative Sentiment: Reported insider trading shows 30 Netflix open-market sales and no purchases over the past six months. While such sales may reflect compensation or diversification, the one-sided pattern can weigh on sentiment and contrasts with Ackman’s new bullish position. Quiver Quantitative article
Analyst Upgrades and Downgrades
A number of equities research analysts recently weighed in on the stock. Jefferies Financial Group cut their price objective on shares of Netflix from $128.00 to $110.00 and set a “buy” rating on the stock in a research note on Wednesday, June 10th. Oppenheimer set a $85.00 price objective on shares of Netflix and gave the company an “outperform” rating in a report on Friday, July 17th. Barclays dropped their target price on Netflix from $85.00 to $80.00 and set an “equal weight” rating on the stock in a report on Friday, July 17th. Sanford C. Bernstein set a $95.00 price target on Netflix and gave the company an “outperform” rating in a research report on Friday, July 17th. Finally, TD Cowen cut their price objective on Netflix from $112.00 to $100.00 and set a “buy” rating for the company in a report on Friday, July 17th. Four equities research analysts have rated the stock with a Strong Buy rating, thirty-four have assigned a Buy rating, sixteen have issued a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, Netflix has a consensus rating of “Moderate Buy” and an average price target of $103.48.
View Our Latest Report on NFLX
Insider Buying and Selling at Netflix
In other Netflix news, insider David A. Hyman sold 5,723 shares of the company’s stock in a transaction on Tuesday, August 4th. The shares were sold at an average price of $72.85, for a total transaction of $416,920.55. Following the sale, the insider directly owned 316,100 shares of the company’s stock, valued at approximately $23,027,885. This represents a 1.78% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Gregory K. Peters sold 27,312 shares of the company’s stock in a transaction on Thursday, August 6th. The shares were sold at an average price of $73.54, for a total transaction of $2,008,524.48. Following the completion of the transaction, the chief executive officer owned 120,931 shares in the company, valued at approximately $8,893,265.74. This represents a 18.42% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 600,295 shares of company stock valued at $49,056,671 over the last 90 days. Company insiders own 1.24% of the company’s stock.
Netflix Stock Down 0.1%
NFLX stock opened at $78.16 on Friday. The firm has a market cap of $325.45 billion, a PE ratio of 24.60, a PEG ratio of 0.98 and a beta of 1.52. Netflix, Inc. has a 1 year low of $65.08 and a 1 year high of $126.71. The company has a fifty day simple moving average of $74.67 and a 200 day simple moving average of $84.54. The company has a current ratio of 1.14, a quick ratio of 1.14 and a debt-to-equity ratio of 0.39.
Netflix (NASDAQ:NFLX – Get Free Report) last issued its quarterly earnings results on Thursday, July 16th. The Internet television network reported $0.80 EPS for the quarter, topping the consensus estimate of $0.79 by $0.01. Netflix had a return on equity of 40.02% and a net margin of 28.22%.The company had revenue of $12.56 billion for the quarter, compared to the consensus estimate of $12.58 billion. During the same period in the previous year, the business posted $0.72 EPS. The company’s revenue for the quarter was up 13.4% on a year-over-year basis. Sell-side analysts anticipate that Netflix, Inc. will post 3.59 EPS for the current fiscal year.
Netflix Profile
(Free Report)
Netflix, Inc (NASDAQ: NFLX) is a global entertainment company that provides subscription-based streaming of films, television series, documentaries and other video content. Founded in 1997 by Reed Hastings and Marc Randolph and headquartered in Los Gatos, California, the company began as a DVD-by-mail rental service and introduced streaming video in 2007. Netflix later expanded into producing and distributing original programming, beginning notable original hits in the 2010s, and now operates a content production and distribution ecosystem alongside its licensing activity.
The company’s primary product is its on-demand streaming service, which can be accessed on a wide range of internet-connected devices and delivered through a suite of apps and web platforms.
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Fond Pershing Square se po čtyřech letech vrací do Netflixu, přestože při předchozím odchodu zaznamenal ztrátu 400 milionů USD. Ackman zároveň přidal nové pozice ve Visa, Mastercard, Alcon, Intercontinental Exchange a S&P Global.
Bill Ackman's investment firm Pershing Square has marked a return to the Netflix stock register four years after exiting a position with a $400 million loss.
Pershing Square previously held Netflix, the streaming company, briefly in 2022 before selling out at a loss.
The renewed bet on Netflix comes as Ackman's funds trail the wider market this year.
Ackman’s decision to re-enter Netflix signals a significant change in his outlook on the streaming industry.
It comes as Ackman's Pershing Square disclosed six new stock holdings. As well as the Netflix investment the fund added to its holdings with positions in Visa, Mastercard, eye care company Alcon, exchange operator Intercontinental Exchange and financial data provider S&P Global since the start of the second quarter.
Ackman expects strong earnings growth at the six companies, which he treats as the main driver of investment value over time.
The fund manager also unwound a major media investment elsewhere in the portfolio.
Ackman notably exited an estimated $1.5 billion position in Universal Music Group (AEX:UMG) after the company rejected his $65 billion takeover bid.
Visa and Mastercard, the payments networks, alongside S&P Global and Intercontinental Exchange, the exchange operator, all sit in sectors with high barriers to entry and steady, recurring revenue.
Alcon, the eye care company, rounds out a portfolio now weighted towards defensive, market-leading firms rather than turnaround or takeover bets.
Netflix ve 2. čtvrtletí zvýšil tržby na 12,6 miliardy USD, meziročně o 13 %, a výhled provozní marže pro rok 2026 zůstává na 31,5 %. Firma zároveň odkoupila rekordních 4,7 miliardy USD vlastních akcií.
Key Takeaways Netflix delivered $12.6B in Q2 revenues, up 13%, while 2026 margin guidance remains at 31.5%.Netflix generated $1.5B in Q2 free cash flow and repurchased a record $4.7B of stock.Advertising revenues are tracking toward 43B in 2026, while live sports and content extend into 2027.
Netflix (NFLX - Free Report) shares have plunged 20.9% year to date, a decline steep enough to test the patience of long-term holders. Shares of Netflix have underperformed the broader Zacks Consumer Discretionary sector's decline of 7.5%
Yet a close reading of the company's own second-quarter 2026 disclosures suggests the pullback has more to do with sentiment and rich starting valuation than with any breakdown in the underlying business.
Revenues, margins, cash generation and the forward content calendar all point in a steady, upward direction, which is why the more defensible near-term stance is to hold existing positions or wait for a better entry point rather than exit the name altogether
NFLX Underperforms Industry, Sector YTD
Image Source: Zacks Investment Research
Headwinds remain worth noting. Content amortization growth has pressured near-term margins, and competition for viewer attention from short-form video continues to intensify. Given this combination of accelerating ad monetization, a diversified and still-growing content and live-sports slate extending into 2027, and aggressive capital returns backed by strong free cash flow, the fundamental growth story remains largely intact even as the shares have underperformed year to date.
Fundamentals Still Support a Hold StanceThe first reason to stay invested is straightforward top-line durability. Netflix generated second-quarter revenues of $12.6 billion, up 13% year over year on a reported basis and 12% on an F/X-neutral basis, with double-digit growth recorded in every operating region.
For the full year, the company has narrowed its guidance to $51-$51.4 billion in revenues, implying 13-14% reported growth, alongside a maintained operating margin target of 31.5% for 2026 versus 29.5% in 2025. That margin trajectory implies operating income growth of more than 20% for the year, a rate that outpaces revenue growth and signals continued operating leverage rather than margin erosion.
Regional performance reinforces this picture. EMEA revenues surpassed the $4 billion quarterly mark for the first time, while LATAM and APAC each crossed $1.5 billion, with UCAN revenue growth of 10% reflecting only a partial-quarter impact from the latest U.S. price change.
The Zacks Consensus Estimate for 2026 earnings is pegged at $3.59 per share. This indicates a 41.9% increase from the previous year.
The second reason is cash generation and capital discipline. Free cash flow came in at $1.5 billion for the quarter, and management continues to guide toward approximately $12.5 billion for full-year 2026. That cash flow has funded an aggressive buyback program. Netflix repurchased $4.7 billion of stock in the second quarter alone, its largest quarterly repurchase on record, after its board authorized an additional $25 billion in April on top of remaining prior capacity. The company still had $27.1 billion of buyback authorization left at quarter-end, a cushion that can support the share price through periods of multiple compression even if near-term sentiment stays soft.
The third reason is diversified monetization. Advertising revenues are tracking toward roughly $3 billion for 2026, about double the prior year, with U.S. upfront negotiations described as being in advanced stages as of the July letter. Engagement also remains constructive, with first-half 2026 view hours up 2% year over year despite competition from the Winter Olympics and the World Cup, and non-English-language content again driving more than a third of total viewing. Newer formats, including video podcasts, cloud TV games and creator partnerships, are still small in absolute terms but are scaling quickly and add optionality beyond the core subscription and advertising streams. Technology investment is compounding these efforts: GenAI workflows were used across roughly 300 titles in 2026 for production tasks such as complex visual sequences, while AI-powered planning and reporting tools are being extended to programmatic ad buyers, steps management frames as groundwork for the next phase of advertising growth.
Content Pipeline Extends Into 2026 and 2027Netflix's forward slate underpins these targets. The company has an expanded NFL agreement covering a week-one game, a Thanksgiving Eve matchup, a Christmas Gameday broadcast and a contest in first-quarter 2027, alongside the Tyson Fury versus Anthony Joshua fight and two Major League Baseball events this year. On the entertainment side, upcoming titles include The Whisper Man, The Last House, the final season of Outer Banks, Ryan Murphy's Monster: The Lizzie Borden Story, and international originals inlcuding South Korea's The East Palace, Poland's The Doll, Mexico's Lovesick, and the UK's The Gentlemen S2. Netflix is also premiering an exclusive extended look at Grand Theft Auto VI in August ahead of its industry launch, and recently signed a global streaming licensing agreement with AMC for the entire Walking Dead universe, broadening the near-term catalog while 2027 slate items continue to be layered in through ongoing local-language production deals.
Valuation and Competitive LandscapeFrom a valuation standpoint, Netflix appears overvalued, trading at a forward 12-month price-to-sales ratio of 5.63X, notably higher than the Zacks Broadcast Radio and Television industry's 3.17X, and it carries a Value Score of D, signaling shares are pricier than industry peers relative to underlying sales growth trends.
NFLX’s Valuation
Image Source: Zacks Investment Research
Competition remains intense. Disney (DIS - Free Report) keeps expanding its streaming service alongside parks strength, Apple (AAPL - Free Report) funds original programming despite a smaller subscriber base, and Amazon (AMZN - Free Report) bundles Prime Video with its e-commerce ecosystem to retain viewers. Disney, Apple and Amazon all compete for the same premium content budgets and advertiser dollars Netflix is targeting. Even so, Netflix's global scale, ad-tier momentum and expanding live-sports rights give it a durable edge over rivals like Disney, Apple and Amazon that arguably justifies some premium, so investors may still prefer holding the stock or waiting for a better pullback entry point rather than chasing shares at current levels.
ConclusionWith revenue guidance intact, margin expansion on track, ads scaling toward $3 billion, and a content and live-sports calendar extending through 2027, Netflix's fundamentals remain sound despite the year-to-date decline. Investors already holding shares have reason to stay put, while those on the sidelines may find further weakness a more attractive entry point than chasing strength. NFLX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Netflix vzrostl ve čtvrtek o více než 4 % poté, co Bill Ackman prostřednictvím Pershing Square oznámil nový 4,9% podíl. Fond věří v dlouhodobý růst firmy.
Netflix NFLX stock rose more than 4% on Thursday after billionaire investor Bill Ackman's Pershing Square Capital Management disclosed a new stake in the streaming giant, marking a return to the company more than four years after exiting its previous investment at a loss.
In its second-quarter shareholder letter, Pershing Square revealed it had acquired a 4.9% portfolio stake in Netflix.
The hedge fund, known for running a concentrated portfolio of fewer than a dozen holdings, said it believes the streaming company is well-positioned for long-term growth despite the stock's sharp decline from last year's peak.
The renewed investment comes as Netflix continues expanding its advertising business and live sports offerings while investors reassess the company's valuation following a prolonged share-price correction.
Pershing Square said its investment thesis has changed significantly since it exited Netflix in early 2022 after losing more than $400 million on the position.
"When we first invested in early 2022, investors feared an escalating content arms race among a crowded field of streaming entrants," Bill Ackman and Pershing Square Chief Investment Officer Ryan Israel wrote in the shareholder letter.
The executives argued that those concerns have largely faded, adding that "Netflix has since effectively won the streaming wars."
They pointed to the company's dominant subscriber base, saying its scale has become self-reinforcing and allows Netflix to outspend rivals on content while converting roughly 90% of its earnings into free cash flow.
Pershing also said it expects Netflix "to compound revenue at a double-digit growth rate, with content costs growing more slowly than revenue, driving continued margin expansion," while describing the stock's valuation as "a substantial discount" and "highly attractive in terms of business quality and prospective earnings growth."
Pershing's renewed confidence comes as Netflix continues adding new revenue streams beyond its traditional subscription business.
The company has expanded into live sporting events to attract additional viewers while growing its lower-priced, ad-supported subscription tier.
According to the reports, Netflix expects its advertising business to generate approximately $3 billion in revenue this year, while its 2026 US Upfront advertising commitments have nearly doubled from a year earlier.
Pershing also argued that concerns over competition from short-form video platforms have proven overstated.
The firm believes Netflix has sufficient financial resources to absorb higher computing costs associated with artificial intelligence and expects AI to improve both content recommendations and advertising targeting over time.
Netflix shares remain well below their previous highs after concerns surrounding engagement, failed acquisition rumors, and the company's abandoned attempt to acquire Warner Bros. Discovery weighed on investor sentiment.
The stock has fallen roughly 42% from last year's peak and was trading at around 24 times earnings, well below its three-year average valuation multiple of 43.
Pershing said the broader market's focus on artificial intelligence infrastructure investments has created opportunities in other sectors.
Ackman and Israel wrote that the environment has enabled the firm to deploy nearly $5 billion since Pershing Square's initial public offering earlier this year.
It's been a little over five months since the global movie and streaming giant Netflix (NFLX -1.97%) walked away from an $82.7 billion bid to acquire Warner Bros. Discovery's film and studio assets, paving the way for its rival Paramount Skydance to buy the entire company.
Since then, Netflix's stock has come under pressure as investors rethink the company's growth prospects as it shifts out of its previous rapid expansion phase toward a more mature business model. But what might the next five years have in store for Netflix and its shareholders?
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Is buying growth better than slowing growth? Netflix's stock price initially surged after management decided to cede the fight for Warner Bros. to Paramount Skydance. Investors had been worried about the financial risks Netflix would be taking on if it managed to seal the deal -- specifically, the prospect of taking on billions in additional debt to finance the buyout and the challenges of combining two large and complex businesses into a cohesive whole.
However, with the benefit of hindsight, it's easy to see why management thought the megamerger was a good idea before a competing bid from Paramount made the price too steep to justify: Netflix is running out of organic growth, and that has been causing its stock to rapidly lose its premium valuation.
The company's second-quarter earnings highlight this troubling trend.
Revenue rose by just 13% year over year to $12.6 billion, a deceleration from the top-line growth rate of 16% that Netflix enjoyed in the corresponding quarter of 2025. More importantly, engagement growth is also soft, with viewing hours up by just 2% in the first half of the year. This suggests most of Netflix's revenue growth is now coming from squeezing more money out of existing users instead of attracting and engaging new ones -- a symptom of the heavy competition in the streaming space.
Netflix is becoming a mature business No company can expand at a breakneck pace forever. But the transition from being a growth business to a mature business doesn't necessarily have to be a train wreck, and Netflix has several key advantages that can help smooth the way. For starters, it enjoys immense size and brand recognition, which will help it generate substantial shareholder value, even as engagement growth begins to plateau.
Even small increases in pricing across over 325 million subscribers can translate to meaningful revenue and profit growth. And Netflix is still at the early stages of monetizing its most exciting strategy: advertising.
Image source: Getty Images.
Management expects to deliver $3 billion in total advertising revenue in 2026, which would be double the figure it reported last year. The fact that this business has been able to scale up so rapidly is evidence of the natural advantages provided by Netflix's scale. And this might only be the beginning: Analysts at the World Advertising Research Center project that Netflix's ad revenue will hit $8 billion by 2030 as it continues to improve its technology and expand its global advertiser base.
Investors also shouldn't overlook Netflix's international opportunities. While the company has already penetrated over half of American households, it has much more room to grow in regions like Asia, especially as it invests in localized, native language content. The company has already created over 200 originals in India, and its deep pockets and global experience will likely help it stand out from the local competition.
What will the next five years have in store? Netflix is a mature company. And because it is already so large, even huge opportunities like digital advertising and international expansion will only contribute modest growth to its top line. That said, shares trade at a reasonable forward price-to-earnings (P/E) multiple of 23, which is just slightly higher than the S&P 500's average forward P/E of 21. And if shares continue to decline, Netflix could soon become an attractive value pick for long-term investors.
Netflix klesl asi o 43 % z 52týdenního maxima a obchoduje se za zhruba 20násobek očekávaného zisku. Firma přesto letos čeká tržby 51,0 až 51,4 miliardy USD a provozní marži 31,5 %.
Netflix (NFLX -2.00%) trades at $72.39 as of this writing, down about 43% from its 52-week high of $126.71. Along the way down, something notable happened to the stock's price tag: Shares finally look reasonably priced. The stock now costs about 20 times the earnings analysts expect from the company over the coming year. At last year's high, the same forward estimate would have priced the stock in the mid-30s.
The rapid-growth premium, in short, is gone. The interesting question is what the stock is worth by 2029 if the business simply keeps doing what its own guidance describes. The arithmetic is worth walking through.
Image source: The Motley Fool.
The business behind the de-rated price Netflix's second-quarter results, reported in mid-July, show a company still growing at a double-digit pace -- just a slower one. Revenue rose 13% year over year to $12.6 billion, in line with the company's forecast. But the trajectory is what the market is watching: growth of 16.2% in the first quarter became 13.4% in the second, and management's third-quarter forecast implies about 12%. That's a clear deceleration.
For the full year, Netflix expects revenue of $51.0 billion to $51.4 billion, or 13% to 14% growth, along with an operating margin of 31.5%, up from 29.5% in 2025. That margin target implies operating income growth of more than 20% this year. Profits, in other words, are still compounding meaningfully faster than sales. Second-quarter operating income rose 11% year over year to $4.2 billion, and the company still expects about $12.5 billion of free cash flow for the year -- enough to support substantial share repurchases.
Two other pieces matter for the next three years. The first is advertising. Management projects the streaming service's ads revenue will roughly double in 2026 to approximately $3 billion. That's only about 6% of total revenue, but it's a fast-growing 6%, and it gives Netflix another growth lever beyond subscription price increases.
The second is share repurchases. Netflix bought back $4.7 billion of stock in the second quarter, its largest quarter ever, and it has $27.1 billion of authorization remaining.
The company's balance sheet drama has also cleared. Its agreement to buy Warner Bros. Discovery's streaming and studios businesses, including HBO Max, was terminated in February, and Netflix collected a $2.8 billion termination fee for its trouble.
The arithmetic to 2029 Now the forward math, piece by piece, with round numbers.
If revenue growth eases from about 13% this year to about 10% by 2029 (a continued glide, not a sharp break), revenue lands near $68 billion to $70 billion in 2029.
Margins should keep helping. Netflix has expanded its operating margin by about two percentage points a year recently. Assume that pace slows, and the margin settles around 35% by 2029. That puts operating income near $24 billion, up about 50% from this year's implied level.
Buybacks then do their part. Add a steadily shrinking share count, and earnings per share could plausibly reach about $5.00 to $5.50 in 2029, up from the roughly $3.50 analysts expect over the coming year.
The last variable is the multiple. Hold today's 20 times forward earnings, and those figures imply a stock price somewhere near $100 to $110 by 2029. Stretch the multiple range from 18 to 22 (pessimism on one end, a mild rerating on the other), and the band widens to about $90 to $120.
Today's Change
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-2.00
%) $
-1.46
Current Price
$
71.71
From $72.39, the midpoint of that range works out to an annualized return of about 13%. Not spectacular, but comfortably ahead of what most investors should expect from the broader market. And it requires no heroics, only Netflix hitting the trajectory its own guidance already sketches.
Of course, the arithmetic cuts the other way if the deceleration doesn't stop. If revenue growth slides through 10% and keeps going, the margin story eventually stalls with it, and a market already refusing to pay a premium could mark the multiple down further. That's the scenario the current price is bracing for.
My own read is that Netflix by 2029 is probably a $90-to-$120 stock, and the outcome inside that range comes down to growth stabilizing in the double digits. That's a fair price today, not an obviously cheap one. I'm not buying yet, but a quarter or two of steadier revenue growth would probably change my answer.
Netflix uzavřel s AMC Global Media víceletou globální licenční dohodu údajně za 500 milionů USD na The Walking Dead Universe. Od roku 2027 získá spoluexkluzivní práva ke 371 epizodám včetně všech spin-offů.
Netflix is doubling down on one of television’s biggest franchises, signing a massive new licensing agreement worth a reported $500 million to bring The Walking Dead Universe to audiences around the world.
AMC Global Media announced Thursday that it has reached a multi-year global licensing agreement with Netflix that will give the streaming giant co-exclusive rights to the original “The Walking Dead” series and all six of its spin-offs. In total, the deal covers 371 episodes spanning the entire franchise.
Netflix has been the exclusive U.S. streaming home of The Walking Dead since 2011, helping introduce the survival drama to millions of viewers. Now, thanks to the new agreement, its availability extends to additional markets including the U.K., Italy, Australia, and New Zealand.
The deal is particularly notable because Netflix will not have exclusive rights. Instead, the company will share streaming access with AMC+, meaning it will end Netflix’s more than decade-long exclusive hold on the series.
The $500 million price tag ranks among the most expensive television licensing deals in recent years. (For comparison, HBO Max paid $425 million to bring “Friends” from Netflix to its platform in 2020.)
Additionally, the move comes as recent data suggests many Netflix subscribers don’t stick around for second seasons of newer shows, making established franchises with hundreds of episodes a safer bet for driving binge-watching and overall viewing hours.
Beginning in 2027, Netflix subscribers around the world will also gain access to the franchise’s entire slate of spin-offs, including “Fear the Walking Dead, “World Beyond Tales of the Walking Dead,” “Dead City,” “Daryl Dixon,” and “The Ones Who Live.”
The agreement also arrives as “Dead City” returns for its third season. Fans are also looking ahead to the final season of “Daryl Dixon,” scheduled to premiere in 2027.
The Walking Dead joins a growing list of popular shows Netflix has pursued to drive engagement. Over the years, it has spent billions securing streaming rights to series such as “The Office,” while earlier this year it also reached a deal to stream “Sesame Street.”
Meanwhile, the announcement provided a boost to AMC Networks’ financial outlook. The company unveiled the Netflix agreement alongside its quarterly earnings report on Thursday, using the deal to raise its forward guidance.
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Lauren covers media, streaming, apps and platforms at TechCrunch.
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Netflix sází na vybrané živé akce, které táhnou nové předplatitele; šest z jeho 10 největších dnů registrací za pět let přišlo právě díky nim. Letos mají živé přenosy tvořit asi 5 % výdajů na obsah a 1 % sledovanosti.
Key Takeaways Netflix uses selective live events to drive subscriber sign-ups, engagement and advertising growth. NFLX says six of its 10 biggest sign-up days in five years were driven by live events. Netflix uses live broadcasts to promote originals and expand content discovery across its platform. Netflix's (NFLX - Free Report) expanding investment in live programming is emerging as a key driver of its long-term subscriber growth strategy. Rather than pursuing an expensive portfolio of premium sports rights, the company has adopted a selective approach by adding live sports, entertainment specials and marquee events that complement its on-demand library. Recent initiatives, including the MLB Home Run Derby, the World Baseball Classic in Japan and other live entertainment events, reflect Netflix's efforts to attract new members while expanding engagement and advertising opportunities. Live programming is evolving into a strategic extension of Netflix's core streaming business rather than a standalone offering.
Early results suggest that live content is generating meaningful business value despite representing a small portion of Netflix's content investment. Six of the company's 10 largest new-member sign-up days over the past five years have been driven by live events. While live programming is expected to represent roughly 5% of content spending and only about 1% of viewing hours this year, it has been supporting subscriber acquisition, advertising demand and content discovery. Total viewing hours increased 2% year over year in the first half of 2026, adding roughly 1.5 billion viewing hours.
Netflix is also leveraging live events to strengthen its broader content ecosystem by using marquee broadcasts to promote original series and encourage viewers to discover additional programming. This integrated approach enhances returns on content investments by extending viewer engagement beyond live events while creating premium advertising inventory for marketers.
By focusing on high-impact live events that drive new-member acquisition, deepen engagement and expand advertising opportunities, Netflix is strengthening another lever for subscriber growth. As the company expands its live content portfolio in a disciplined manner, the strategy could support sustained subscriber growth while creating additional monetization opportunities.
How Netflix Stacks Up Against PeersCompared with Disney (DIS - Free Report) and Warner Bros. Discovery (WBD - Free Report) , Netflix's live content strategy is more selective and event-driven. Disney continues to rely on ESPN and premium sports rights to drive engagement, while Warner Bros. Discovery leverages TNT Sports and live programming across its media portfolio. In contrast, Netflix focuses on marquee live events that complement its on-demand library and support subscriber acquisition. As Disney expands its streaming bundle and Warner Bros. Discovery integrates live sports into Max, Netflix's disciplined approach could help sustain membership growth while enhancing advertising opportunities.
NFLX’s Price Performance, Valuation & EstimatesShares of Netflix have declined 22.8% year to date, underperforming both the Zacks Broadcast Radio and Television industry and the Zacks Consumer Discretionary sector’s fall of 20.9% and 9.6%, respectively.
NFLX’s YTD Share Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Netflix appears overvalued, trading at a forward 12-month price-to-earnings ratio of 19.36X, higher than the sector’s 16.4X. NFLX carries a Value Score of D.
NFLX’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NFLX’s 2026 earnings is pegged at $3.59 per share, down by a penny over the past 30 days. This indicates a 41.9% increase from the previous year.
NFLX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
