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The success of the Zulu language ‌film "The Polygamist", which stunned its creators and cast by becoming a global hit, has put momentum behind a slate of new Netflix series and films coming soon from South Africa, company officials said on Wednesday.

At an event marking a decade of the streaming service's ​presence in South Africa, Netflix executives announced sequels to the popular series "Blood Legacy", "Seriously Single Too" and "Another Disaster ​Holiday", all launching before year-end.

South Africa's, and the world's, appetite for reality TV will also ⁠be satisfied with new shows "Love is Blind: South Africa" and wedding docu-soap "Stars & Vows".

Ben Amadasun, Netflix's Vice President for ​the Middle East and Africa, told attendees that more than 300 South African titles had been aired since the service's ​launch in the country in 2016, supporting 8,000 jobs with some 30 local production companies.

'THE POLYGAMIST' SMASHES NETFLIX TOP 10
The main cause for celebration was the success of "The Polygamist". Amadasun said it was in Netflix's top 10 titles in 62 countries for seven consecutive ​weeks. Released in June, it has since had nearly 28 million views.

The plot centres around Jonasi Gomora, who rises ​from a poor township background to become a powerful and charismatic banking executive, and his wife, Joyce, on whom he constantly ‌cheats while ⁠fathering children with several younger women -- and from whom he also hides a previous but ongoing marriage.

"I never wanted people to like this character one bit," South African actor S'dumo Mtshali told Reuters in an interview. He said that in order to embody the character, "I had to really be honest about myself as a person, as a male." ​He also examined numerous sex ​abuse scandals involving public ⁠figures.

The telenovela, based on a 2012 novel by Zimbabwean author Sue Nyathi, explores African themes including complex family dynamics, patriarchy, polygamy and the ways in which Western colonial norms ​warped and eroded traditional values.

But Gomora also embodies a blend of ruthlessness, toxic masculinity ​and entitlement toward ⁠women that is recognisable across cultures and eras, from ancient Greek heroes and medieval kings to some contemporary politicians and celebrities.

"This character is our leaders, our politicians, our bosses, our uncle, our fathers. He's ... the dark mirror," Mtshali said.

Perhaps that's ⁠why the ​series resonated around the world.

"Seeing the engagement from everyone, everywhere. It ​was a wild, wild experience ... I'm still pinching myself," executive producer and co-director Gugulethu Zuma-Ncube told Reuters in an interview.

"The ... story was specific and ​culturally authentic ... but the wider themes I think anybody could relate to," she said.

(This story has been corrected to clarify that the film had no award nomination in paragraph 5.)

Netflix Inc (NASDAQ:NFLX) stock traded lower by more than 2% on Tuesday as risk appetite softens across growth and media names.

The Nasdaq is down 0.20% while the S&P 500 has shed 0.44%, and Communication Services is also in the red (down 0.67%), keeping pressure on the group.

• Netflix stock is trending lower. What’s driving NFLX stock lower?

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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Analyst’s Disclosure: I/we have a beneficial long position in the shares of NFLX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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.

Netflix's stock has been falling sharply this year, but its valuation remains in line with the S&P 500 average. In the past, investors have paid a far higher multiple for Netflix's stock.

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.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

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.

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?

Let's take a look at what these Wall Street heavyweights have to say about Netflix (NFLX - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

Netflix currently has an average brokerage recommendation (ABR) of 1.63, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 50 brokerage firms. An ABR of 1.63 approximates between Strong Buy and Buy.

Of the 50 recommendations that derive the current ABR, 32 are Strong Buy and four are Buy. Strong Buy and Buy respectively account for 64% and 8% of all recommendations.

Brokerage Recommendation Trends for NFLX

Check price target & stock forecast for Netflix here>>>

While the ABR calls for buying Netflix, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Should You Invest in NFLX?Looking at the earnings estimate revisions for Netflix, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $3.59.

Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Netflix. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Netflix.

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.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in NFLX over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Explore the exciting world of Netflix (NFLX +2.38%) with our contributing expert analysts in this Motley Fool Scoreboard episode. Check out the video below to gain valuable insights into market trends and potential investment opportunities! *Stock prices used were the prices of Jul. 22, 2026. The video was published on Sep. 2, 2026.

Anand Chokkavelu has positions in Netflix. Jason Hall has no position in any of the stocks mentioned. Rick Munarriz has positions in Netflix. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

Netflix (NFLX +1.68%) has been a bona fide growth stock for two decades. But all companies mature at some point, and that time has come for the streaming giant. The story is becoming less about subscriber growth and more about pricing power and monetization levers that will power the company's earnings growth.

It hasn't been a smooth transition for Netflix stock, which is still down nearly 40% from its highs seen last summer. Fortunately, I don't think the pain and anguish of falling stock prices will last much longer. Here's why the next three years look promising, and what that could mean for your portfolio.

Image source: The Motley Fool.

Robust profit growth through multiple levers The best businesses have several ways to grow their top and bottom lines, and Netflix fits squarely into that. Of course, Netflix can still bring new subscribers to its platform. Just because that's no longer the primary growth engine doesn't mean it's irrelevant.

But the focus is changing. Netflix has built up several additional growth engines to help pick up the slack as subscriber growth matures. For instance, ad-supported subscriptions have become a major part of the puzzle, now reaching roughly 250 million people.

The company has also expanded its platform to live sports and events, podcasts, and video games. And lastly, Netflix can raise its prices, something it has already done in addition to cracking down on password-sharing.

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Mapping where the stock can go from here As you can see below, Netflix is growing by leaps and bounds over the past three years in the areas that count: revenue, cash flow, and earnings. Perhaps the market will appreciate that more at some point.

Data by YCharts.

For now, the stock's slump has knocked its valuation to less than 23 times its 2026 earnings estimates. Wall Street estimates call for earnings growth averaging 22% annually over the next three to five years.

Suppose for a second that Netflix's valuation doesn't change whatsoever. If the company grows as expected, the stock would roughly double over the next three years based on the earnings growth alone. Even if earnings growth falls short of estimates, it's not a stretch to expect double-digit annualized returns barring Netflix simply imploding and growth falling off a cliff.

That's probably a good spot to ground your expectations for Netflix stock. It's easy to look back and see how much cheaper Netflix is relative to its historical norms, but Netflix isn't the same type of company it once was. There's nothing wrong with that; it's just an adjustment investors may want to consider.

That doesn't change the bottom line: Netflix is setting up nicely for patient investors to enjoy strong returns over the next few years.

Netflix (NFLX -0.18%) has not performed well over the past year. The company's financial results haven't been strong, engagement on its platform isn't meeting market standards, and competition in the streaming industry is heating up. Can Netflix bounce back and still perform well over the long run? Recent reports suggest that the company is actively looking for ways to improve the business, and one initiative it is considering could be a game changer. Let's discuss what Netflix's management is cooking up behind the scenes and what it means for the company's future.

Image source: The Motley Fool.

Netflix is considering a shift in strategyNetflix no longer publishes its number of paid subscribers every quarter. But according to some estimates, it has 325 million paid subs and is well ahead of its peers. That may be why the company is considering opening up its platform to some of its competitors. Netflix is apparently weighing signing deals with other streaming services to allow its members to subscribe to and watch those services without leaving the Netflix app. So, Netflix could become a go-to streaming hub.

This would be a reversal in Netflix's strategy, since the company had previously resisted this idea. For instance, in the press release announcing its financial results for the second quarter of 2024, Netflix said:

We haven't bundled Netflix solely with other streamers like Disney+ or Max because Netflix already operates as a go-to destination for entertainment thanks to the breadth and variety of our slate and superior product experience.How it could impact Netflix's financial results If Netflix moves ahead with these plans, it could have a massive impact on the company's financial performance. For one, it would almost certainly increase engagement on its platform since some of the time subscribers spend on other streaming services will be redirected to its app. Sure, they wouldn't be watching Netflix's original shows if they were merely accessing another platform through its app. But this spike in engagement will make Netflix a much more attractive advertising platform and boost ad-related revenue. This business still accounts for a fairly small percentage of the company's top line.

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Netflix estimates it will generate $3 billion in ad sales this year, roughly double last year's total. But that represents slightly less than 25% of the company's second-quarter revenue. Ad sales would become a much more meaningful growth driver with the new strategy the company is considering. And there might be other benefits. Netflix could charge other streaming services for access to its customers, creating a high-margin revenue stream. This initiative may also give Netflix access to even more data to improve its recommendation algorithm and content strategy, thereby strengthening its core business.

This wouldn't be the first time Netflix decided to do something it had long said it wouldn't. The company launched its low-price ad-supported tier several years ago, after spending years scoffing at the idea of displaying ads. The results have been excellent. Netflix was able to appeal to price-sensitive customers and compete with other streaming leaders that offered similar low-priced options. This is a sign that Netflix's management is flexible and willing to change its strategy as the competitive landscape evolves, a great quality for a leadership team. Meanwhile, Netflix still has a vast opportunity across streaming and advertising.

Streaming still accounts for less than 50% of television viewing time in the U.S., arguably one of Netflix's most penetrated markets. There remains a massive runway for growth for the company as cable continues to die out. Further, Netflix benefits from a wide moat. The company's brand name is intimately tied to streaming, and its deep ecosystem exhibits a strong data feedback loop, as more viewers mean more data to inform its content strategy. Netflix would be leveraging this advantage if it decides to grant its users access to other streaming platforms through its app.

The bottom line: The company still has ample monetization opportunities that could help it improve its financial results and bounce back from its recent slump. That's why the stock is still a buy.

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.

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.

BNP Paribas reduced its stake in shares of Netflix, Inc. (NASDAQ:NFLX – Free Report) by 44.0% in the 2nd quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund owned 41,475 shares of the Internet television network’s stock after selling 32,532 shares during the quarter. BNP Paribas’ holdings in Netflix were worth $2,961,000 at the end of the most recent quarter.

Several other institutional investors and hedge funds also recently made changes to their positions in the stock. Imprint Wealth LLC acquired a new stake in Netflix in the 3rd quarter valued at $25,000. Atlas Capital Advisors Inc. acquired a new position in Netflix during the 4th quarter worth about $26,000. Cornerstone Financial Management LLC bought a new stake in Netflix during the 4th quarter worth about $26,000. Clal Insurance Enterprises Holdings Ltd bought a new stake in Netflix during the 2nd quarter worth about $26,000. Finally, Jessup Wealth Management Inc bought a new stake in Netflix during the 4th quarter worth about $27,000. Institutional investors own 80.93% of the company’s stock.

Insider Buying and Selling In other Netflix news, CEO Gregory K. Peters sold 27,312 shares of the business’s stock in a transaction that occurred on Thursday, August 6th. The stock was sold at an average price of $73.54, for a total transaction of $2,008,524.48. Following the transaction, the chief executive officer owned 120,931 shares of the company’s stock, valued at $8,893,265.74. The trade was a 18.42% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CEO Theodore A. Sarandos sold 27,312 shares of the company’s stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $73.35, for a total value of $2,003,335.20. Following the completion of the sale, the chief executive officer owned 178,954 shares in the company, valued at $13,126,275.90. This represents a 13.24% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 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. Insiders have sold a total of 600,295 shares of company stock worth $49,056,671 in the last quarter. 1.24% of the stock is owned by company insiders.

Analyst Upgrades and Downgrades NFLX has been the subject of several research analyst reports. Bank of America restated a “buy” rating and issued a $125.00 price objective on shares of Netflix in a research report on Monday, May 18th. TD Cowen lowered their target price on Netflix from $112.00 to $100.00 and set a “buy” rating for the company in a research note on Friday, July 17th. KGI Securities lowered shares of Netflix from an “outperform” rating to a “neutral” rating and set a $75.00 target price on the stock. in a research note on Friday, July 17th. Citigroup reiterated a “market perform” rating on shares of Netflix in a research report on Monday, August 17th. Finally, Wells Fargo & Company set a $80.00 target price on shares of Netflix and gave the stock an “equal weight” rating in a report on Friday, July 17th. Four equities research analysts have rated the stock with a Strong Buy rating, thirty-three have assigned a Buy rating, seventeen have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and an average price target of $103.19. Read Our Latest Research Report on NFLX

Key Headlines Impacting Netflix Here are the key news stories impacting Netflix this week:

Positive Sentiment: Bill Ackman’s Pershing Square reportedly added approximately 13.1 million Netflix shares, making NFLX one of the hedge fund’s new concentrated holdings. The move may bolster investor confidence in Netflix’s valuation and long-term earnings potential. Bill Ackman portfolio overhaul article Positive Sentiment: Analysts and market commentators point to Netflix’s rapidly expanding advertising business, a potential $3 billion advertising revenue opportunity, continued global expansion and margin growth as catalysts for a possible recovery toward $100 and beyond. Record share buybacks could further support earnings per share. Netflix stock price prediction article Positive Sentiment: Netflix is being described as an undervalued long-term holding, with bullish arguments centered on double-digit revenue growth, free-cash-flow generation and the ability to monetize live events and lower-priced ad-supported plans. Netflix five-year outlook article Neutral Sentiment: The Netflix preview of Grand Theft Auto VI attracted significant online attention and traffic, but the immediate stock-market beneficiary appears to be Take-Two Interactive, the game’s publisher, rather than Netflix. GTA 6 Netflix preview article Negative Sentiment: Some analysts argue that Netflix’s growth is moderating and that Alphabet offers stronger diversification, advertising exposure and valuation. Recent commentary also identifies resistance near $82 and muted enthusiasm following the latest earnings report. NFLX versus GOOGL article Negative Sentiment: Reported insider activity remains a potential overhang: executives and directors made numerous sales and no purchases over the past six months. Investors may interpret the selling as reduced insider conviction, although it may also reflect routine diversification. Netflix ad monetization and market resistance article Netflix Stock Performance NFLX opened at $81.72 on Friday. The company has a market capitalization of $340.28 billion, a price-to-earnings ratio of 25.72, a P/E/G ratio of 1.00 and a beta of 1.52. The business’s 50-day moving average price is $74.65 and its two-hundred day moving average price is $84.33. The company has a debt-to-equity ratio of 0.39, a current ratio of 1.14 and a quick ratio of 1.14. Netflix, Inc. has a 1 year low of $65.08 and a 1 year high of $126.71.

Netflix (NASDAQ:NFLX – Get Free Report) last released its quarterly earnings results on Thursday, July 16th. The Internet television network reported $0.80 earnings per share for the quarter, topping analysts’ consensus estimates of $0.79 by $0.01. Netflix had a return on equity of 40.02% and a net margin of 28.22%.The firm had revenue of $12.56 billion during the quarter, compared to the consensus estimate of $12.58 billion. During the same quarter in the prior year, the firm posted $0.72 EPS. The business’s revenue was up 13.4% on a year-over-year basis. Equities analysts expect that Netflix, Inc. will post 3.59 EPS for the current fiscal year.

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.

Further Reading Five stocks we like better than Netflix 3 Financial Stocks Positioned for the Fed’s Next Move After Jackson Hole IREN’s AI Pivot Looks Real, But the Market Wanted a Faster Payoff After Earnings Boeing’s $131B F-15 Win: Mach 1 Momentum or Just Altitude? Okta Stock Surges 29%—Is $200 the Next Stop? Want to see what other hedge funds are holding NFLX? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Netflix, Inc. (NASDAQ:NFLX – Free Report).

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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.

Netflix (NFLX +2.35%) has a strange problem. Its stock was recently down roughly 40% from its 2025 peak, yet the underlying business continues to grow.

In the second quarter of 2026, Netflix generated $12.6 billion in revenue, up 13% year over year. Operating income reached $4.2 billion, while operating margin remained above 33%. Those aren't the numbers of a broken business.

That creates an important question for investors: Has the sell-off finally made Netflix stock attractive? Let's explore further.

Image source: Getty Images.

Has Netflix's business actually deteriorated? The business has not suffered nearly as much as the stock price suggests. Netflix remains one of the world's largest entertainment platforms, and its audience continues to spend enormous amounts of time using the service. During the first half of 2026, viewers watched more than 97 billion hours of Netflix content.

The financial picture also remains healthy. Revenue is growing at a double-digit rate, profitability remains strong, and management expects operating income to grow faster than revenue this year. That last point is particularly important. Netflix isn't simply selling more subscriptions; it's becoming more profitable as it grows, thanks to operating leverage.

And then there's advertising. Netflix's ad-supported plans now reach more than 250 million monthly active users globally. The company expects advertising revenue to reach roughly $3 billion in 2026, about double the prior-year figure.

That's still a small number compared with Netflix's overall business. But it gives the company another way to grow without relying entirely on adding subscribers. So, no, Netflix's business hasn't deteriorated anywhere close to 40%.

Why did investors turn against the stock? For years, Netflix was valued as a high-growth company. Investors expected rapid subscriber growth, expanding international markets, and years of rising revenue. They were willing to pay a premium because they believed its best growth was still ahead.

But Netflix is no longer a young company disrupting a new industry; it's now enormous. That creates a natural challenge. Adding another 100 million customers is much harder when a company already serves hundreds of millions of people.

Recent developments have reinforced those concerns. Netflix's latest forecast came in below Wall Street's expectations. The company also plans to reduce the frequency of its viewing-hours reports beginning in 2027. Those changes raised questions about the pace of growth and engagement.

Then came Warner Bros. Discovery. Netflix pursued a deal for the other company's studio and streaming assets, but the situation turned into a bidding battle with Paramount Skydance. When the price rose beyond what Netflix considered attractive, management walked away rather than chase the deal.

I think that was the right decision. But the episode highlighted a concern that investors hadn't been focused on before: Does Netflix need to spend tens of billions of dollars to find its next phase of growth? In other words, they have concerns about whether Netflix can sustain its double-digit growth rate in the coming years.

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Is the sell-off finally enough? A 40% decline doesn't automatically make a stock a bargain. A company can lose 40% of its market value and still be expensive if its future earnings prospects have fallen even further.

In the case of Netflix, the recent decline may put the stock into the bargain territory if it meets these three tests: Can the company sustain healthy revenue growth? Can it continue expanding margins? And can advertising become a much larger business?

If the answers are yes for all three, that would give investors something valuable: a mature core business with another meaningful growth opportunity developing alongside it.

What does this mean for investors? Netflix's steep stock decline has changed the risk-reward equation. Meanwhile, the business is still growing. Advertising is expanding rapidly. And Netflix has shown discipline by refusing to chase Warner Bros. at a price it no longer considers attractive.

The market, meanwhile, has become much more skeptical. After all, the 2026 revenue growth rate is expected to moderate to between 13% and 14%, down from 16% a year earlier. I wouldn't buy Netflix simply because the price is down 40%. I'd buy it if I believed the market had become more pessimistic about the company's future than the underlying business deserves.

And for those who are convinced by that argument, buying Netflix stock could be rewarding in the long term.

Netflix Inc. (NASDAQ:NFLX) shares are rising Tuesday. Wolfe Research raised its price target on the stock and argued that recent concerns about viewer engagement are overdone. Here’s what you need to know.

Netflix stock is showing upward movement. Why is NFLX stock advancing? Wolfe Research Says Engagement Concerns Are OverblownWolfe Research kept its Outperform rating on Netflix and lifted its price target to $95 from $84, a move that puts the new target close to 19% above where shares closed Monday.

Analyst Peter Supino said combing through millions of data points tied to how people actually watched Netflix content led the firm to a specific conclusion: the timing of new releases, not any underlying erosion in the business, best explains the softer subscriber and engagement figures from the second quarter. He said the lineup of shows and films set for the third quarter looks more promising, and that Netflix’s expanding live programming push appears to be gaining traction, CNBC reported.

That optimism follows a rockier stretch for the stock. Netflix’s second-quarter numbers, released in July, generally matched what Wall Street had penciled in, but management trimmed the top end and bottom end of its full-year revenue outlook, tightening the range to $51 billion through $51.4 billion from a previous span of $50.7 billion to $51.7 billion.

Wolfe expects Netflix’s results to strengthen in the back half of the year and anticipates the company will issue solid guidance for 2027 as it improves its content release timing and leans further into live programming.

Netflix’s Rally Still Has Overhead Supply to ClearThe stock’s bounce is showing up clearly on the chart, though it hasn’t fully escaped the weight of its longer-term slide. Netflix shares are trading 7.7% above their 20-day average of $76.25 and 10.1% above their 50-day average of $74.53, evidence that buyers have consistently stepped in over the past several weeks. But the stock still sits 0.7% below its 100-day average of $82.69 and 6.9% below its 200-day average of $88.13, exactly the zone where rallies tend to run into investors looking to sell into strength rather than chase it.

Momentum readings are supportive for now. The MACD line has moved above its signal line with a positive histogram, a combination that usually points to fading downside pressure and a rebound that’s building real momentum. Even so, the longer-term damage hasn’t fully healed: the 50-day average remains beneath the 200-day average following a death cross from December 2025, a pattern that tends to keep longer-term investors cautious until the stock proves it can reclaim those bigger trend lines.

Resistance sits at $91.50, a ceiling that roughly matches where overhead supply and the longer-term averages start to weigh on the stock. Support sits at $75, close to the 50-day average, a zone where buyers have recently shown a willingness to defend against pullbacks. Put simply, the stock is trying to shift from a pattern where rallies get sold into one where it trades within a steadier range, and near-term price action will determine how quickly that shift actually takes hold.

NFLX Shares Are ClimbingNFLX Price Action: Netflix shares were up 2.84% at $82.28 at the time of publication on Tuesday, according to Benzinga Pro.

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Jim Cramer called Netflix a falling knife worth catching, but the chart tells a different story about when that window actually opened and whether retail viewers are hearing advice that already expired.

On Tuesday’s Mad Dash on CNBC, Jim Cramer told viewers that Netflix (NASDAQ:NFLX | NFLX Price Prediction) has fallen far enough to be worth a tactical bet, pointing to a fresh price target increase from Wolfe Research and a better second-half release slate. He used the vocabulary traders use when catching something on the way down.

The shares closed at $82.23 that session, up 2.77% on the day. Wolfe raised its target to $95 from $84 while maintaining its existing rating.

The trouble with Cramer’s framing is that Netflix stopped falling weeks ago. The chart shows a stock in recovery, and the tension between his language and the price action is what makes the segment worth pulling apart.

What Cramer Actually Said on Air Cramer’s central claim was that Netflix has been an unusually broken name. “This is a stock that has never recovered, Jim, from when they made the not just bid, but the deal to acquire Warner Brothers,” he said.

From that starting point, he moved to the trade. “I think this thing is low enough that you can literally, in the hedge fund term, take a shot at it,” he told viewers, framing the decision as tactical rather than long-term.

The imagery went further. “This is like, what is this? This is actually a machete. It’s not a knife,” Cramer said, invoking the old market saying about catching falling blades and arguing the damage was severe enough to make the risk worthwhile.

He credited Wolfe for reading the setup correctly. “They’re taking it right from the book. I really love that,” he said, tying the call to an improved second-half content slate. CNBC’s own reporting attributed Wolfe’s target increase to improving viewer engagement, which is a different rationale than a release calendar.

Falling Knife Stopped Falling Weeks Ago The trouble is that the price describes a stock in recovery, not one still in freefall. Over the past week, Netflix is up 5.73%. Over the past month, it is up 17.32%.

The twelve-month picture is still ugly. Netflix is down 32.49% over the past year and down 12.3% year to date.

But the shape of that damage matters. The stock traded at $70.09 on July 24 and closed Tuesday at $82.23, so a meaningful chunk of the discount that made a hedge fund shot attractive has already been taken off the table.

Retail chatter has moved with it. Reddit sentiment shifted from very bearish at 12 on July 31 to bullish at 71-72 by August 1, and it has stayed there. A viewer hearing Cramer’s framing on August 25 is being pointed at an entry that is no longer the entry his words imply.

Bull Case, Fairly Stated The bull case still has merit. A $95 target against an $82.23 close leaves real room. The analyst community broadly agrees, with 29 buys, 7 strong buys, 15 holds, and no sell ratings.

Wolfe’s stated reason, improving viewer engagement, is a durability argument. On the Q2 call, management said view hours grew 2% in the first half of 2026, a slight acceleration versus 1.5% growth in 2025, and that recent price adjustments in the US, Mexico, and Spain were going well.

The advertising business is the second leg. Management is guiding ad revenue to roughly $3 billion in 2026, and Netflix repurchased $4.7 billion of stock in Q2, its largest buyback quarter ever, with approximately $27 billion of remaining authorization.

Cramer framed the setup as a trade, and the language matches: a shot, a hedge fund term, a machete. Investors deciding whether the Warner Brothers overhang is still the dominant story should watch ad revenue disclosures against the roughly $3 billion full-year figure, because engagement is what eventually earns Wolfe’s target and what makes a tactical shot into something a longer-term holder can defend.

Contact [email protected] for any questions or corrections.

Netflix has clawed back more than 21% from its recent low, but the stock still sits well below its peak with three specific catalysts poised to determine whether this rally has real staying power or stalls out.

Netflix (NASDAQ:NFLX | NFLX Price Prediction) has staged a sharp recovery after a rough stretch. Since the stock’s year-to-date (YTD) low on July 20, NFLX is up more than 21%, including a more than 16% gain over the past month. However, shares remain down about 10% YTD and well below their 52-week high of $126.71.

The Street consensus target sits at $103.19 alongside a Moderate Buy rating and nearly 26% potential upside over the following 12 months. But can NFLX realistically reach that price target this year?

NFLX Price Target The bull case rests on three pillars: (1) margin expansion beyond consensus, (2) its March 2026 U.S. price hike, which was its second in less than two years, and (3) a renewed share buyback program. The margin story has real teeth. Netflix guided for a 31.5% operating margin in 2026, up from 29.5% in 2025, and analysts at Citi believe the company can beat that bar. Walking away from the Warner Bros. acquisition and paying the $2.8 billion breakup fee removes a major integration overhang and frees capital for buybacks, which Citi views as a direct catalyst for per-share value creation.

3 Key Drivers of NFLX Stock Performance 1. Advertising revenue scaling fast: Ad revenue more than doubled in 2025 to over $1.5 billion and is expected to roughly double again in 2026. This represents a durable revenue stream that diversifies Netflix beyond pure subscription fees and expands total addressable monetization per user.

2. Pricing power backed by dominant engagement: Netflix held a 9% U.S. TV time share in December 2025, an all-time high, with 96 billion hours watched in H2 2025. That engagement gives the company room to raise prices without meaningful churn.

3. Free cash flow acceleration: Full-year 2025 free cash flow reached $9.46 billion, up 36.68% year over year, with guidance pointing to roughly $11 billion in 2026. Growing free cash flow funds buybacks, content investment and live programming expansion.

What Will It Take for NFLX to Hit Its Price Target? The stock’s Moderate Buy rating implies roughly 26% upside from current levels based on 4.237 billion shares outstanding. A near-term price target in the $111 range would more plausibly reflect the upside. Rather than speculate on the precise target, the key question is what Netflix must deliver: Execute on margin expansion guidance, demonstrate advertising revenue doubling as projected and restart buybacks following the Warner Bros. deal exit.

The primary risk is execution on the advertising business, where Citi itself noted some caution regarding ad revenue projections. Still, with over 325 million paid subscribers, accelerating free cash flow, and renewed capital return capacity, Netflix carries a credible path to meaningful upside.

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In the latest close session, Netflix (NFLX - Free Report) was down 1.99% at $79.84. The stock's change was less than the S&P 500's daily gain of 0.72%. At the same time, the Dow added 0.2%, and the tech-heavy Nasdaq gained 1.57%.

Prior to today's trading, shares of the internet video service had gained 10.63% outpaced the Consumer Discretionary sector's gain of 7.19% and the S&P 500's gain of 3.68%.

The upcoming earnings release of Netflix will be of great interest to investors. In that report, analysts expect Netflix to post earnings of $0.82 per share. This would mark year-over-year growth of 38.98%. In the meantime, our current consensus estimate forecasts the revenue to be $12.88 billion, indicating a 11.9% growth compared to the corresponding quarter of the prior year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.59 per share and revenue of $51.25 billion. These totals would mark changes of +41.9% and +13.42%, respectively, from last year.

Any recent changes to analyst estimates for Netflix should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Currently, Netflix is carrying a Zacks Rank of #3 (Hold).

With respect to valuation, Netflix is currently being traded at a Forward P/E ratio of 22.67. This indicates a premium in contrast to its industry's Forward P/E of 11.72.

Investors should also note that NFLX has a PEG ratio of 1.02 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Broadcast Radio and Television industry was having an average PEG ratio of 1.02.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 157, this industry ranks in the bottom 37% of all industries, numbering over 250.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

Looking out five years, Netflix (NFLX +2.35%) looks like a steady compounder rather than a lottery ticket, with the stock's path to more gains driven by ads, margins, and disciplined growth. So let's get into it. To me, a reasonable outcome is Netflix trading somewhere between $150 and $225 per share, assuming it delivers the growth and margin expansion that management and analysts are modeling today. Remember, it's a 40% stock decline reflecting investor concerns, but it should be a sign of a rebound range. Currently, the ticker is near $80, so some of my ranges imply the ticker will double in five years.

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Netflix's starting point today Right now, Netflix trades at a forward price-to-earnings ratio in the high teens to low 20s, below its five-year average and well under the peak multiples it used to command. Wall Street's 12-month price targets cluster around the mid-90s, with a range from roughly $70 to 135, implying modest upside from current levels rather than a bubble. That sets the stage for a five-year view that depends much more on fundamentals than on multiple expansion.

Management and external research from the company have both pointed to a steady, low-double-digit compound annual revenue growth rate, taking sales from roughly $39 billion to $75–80 billion by around 2030. Key drivers are the ad-supported tier, which some analysts see reaching $10 billion in annual revenue by 2030, continued international subscriber growth, and margin expansion into the mid-20% range as the model scales. On top of that, newer verticals like games and live events should deepen engagement and help support pricing power rather than acting as separate, low-margin side businesses.

Image source: Getty Images.

Building a five-year valuation range One detailed bullish projection I saw calls for Netflix to generate substantially higher earnings and reach roughly $222 per share by 2030, based on a price-to-earnings (P/E) multiple of 38, assuming investors continue to award the company a premium growth valuation. More conservative forecasts, using historical valuation ranges, place the stock closer to $130 to $160 later in the decade.

A middle-ground outlook, assuming earnings compound at roughly 10% to 12% annually and the forward P/E settles in the low to mid-20s, suggests a potential range of about $150 to $225 over the next five years. Where Netflix ultimately lands will depend heavily on the momentum of its advertising business, international growth, and the market's willingness to sustain a higher valuation.

What could push it outside that band? If ad revenue and live sports scale faster than today's bullish projections, or if the market decides to pay more than its current forward earnings again, Netflix could easily sit above the high end of that range. On the other hand, if competition puts pressure on pricing or ad monetization disappoints, the stock could remain closer to today's levels even with solid growth, as the multiple compresses further. So my range is not a promise, but a technically grounded, scenario-based estimate anchored in current five-year forecasts rather than a simple guess.

Investors looking for stocks in the Broadcast Radio and Television sector might want to consider either Gray Media (GTN) or Netflix (NFLX). But which of these two stocks is more attractive to value investors?

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.

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