Netflix, Inc.
NFLX
$77.40
+1.83%
Netflix, Inc. is a global streaming entertainment service offering a vast library of TV series, films, and documentaries via subscription, operating in the highly competitive streaming industry. As the world's largest streaming platform with over 300 million subscribers, it holds a dominant market position, but faces intensifying competition from traditional media and tech giants. The current investor narrative centers on Netflix's strategic pivot into ad-supported tiers and live programming, including sports, as it seeks to sustain growth amid subscriber maturation and rising competitive pressures. Recent stock volatility, driven by mixed earnings guidance and broader market concerns, has sparked debate over its long-term growth trajectory and valuation.…
NFLX
Netflix, Inc.
$77.40
Related headlines
Investment Opinion: Should I buy NFLX Today?
Rating: Buy. The thesis is that Netflix's strong revenue growth (16.2% YoY), robust profitability (net margin 24.3%), and reasonable forward PE (20.5x) offer an attractive risk/reward, with analyst consensus at Buy and an average target of $93.66, implying 19.7% upside. Supporting evidence includes accelerating revenue growth, a PEG ratio of 1.34x, free cash flow of $11.9B, and a 41.3% ROE. The stock is undervalued relative to its growth potential, as the forward PE is below the trailing PE, and the market has punished the stock excessively.
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NFLX 12-Month Price Forecast
The AI assessment is bullish, as Netflix's fundamentals remain strong despite the stock's decline. The accelerating revenue growth and reasonable forward valuation suggest the market is overly pessimistic. However, competition and guidance misses warrant a medium confidence. If Netflix can sustain double-digit growth and improve guidance, the stock could re-rate higher. Key developments to watch include Q3 earnings and subscriber growth in ad-tier.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Netflix, Inc.'s 12-month outlook, with a consensus price target around $93.66 and implied upside of +21.0% versus the current price.
Average Target
$93.66
0 analysts
Implied Upside
+21.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$70 - $135
Analyst target range
Netflix is covered by 45 analysts, with a consensus recommendation of 'Buy' and a mean rating of 1.76 (where 1 is Strong Buy and 5 is Sell). The average price target is $93.66, implying a 19.7% upside from the current price of $78.25. The distribution shows a bullish tilt, with the majority of ratings being Buy or Overweight, reflecting confidence in the company's long-term prospects despite recent headwinds.
Bulls vs Bears: NFLX Investment Factors
Netflix presents a mixed picture: strong revenue growth, robust profitability, and a reasonable forward valuation are countered by severe stock underperformance, intense competition, and guidance misses. The bull case is supported by accelerating revenue (16.2% YoY) and a 19.7% upside to analyst targets, while the bear case is anchored on a 37.8% stock decline and competitive threats. Currently, the bearish sentiment dominates the price action, but the fundamental strength suggests the market may be overly pessimistic. The key tension is whether Netflix can sustain double-digit growth amid competition and subscriber maturation, which will determine if the stock re-rates higher or continues to de-rate.
Bullish
- Revenue Growth Accelerating: Q1 2026 revenue grew 16.2% YoY to $12.25B, accelerating from 14.9% in Q4 2025 and marking the fourth consecutive quarter of double-digit growth. This momentum is driven by subscriber gains and price increases, supported by a record $12.6B in Q2 2026 revenue.
- Strong Profitability and Cash Flow: Net margin is 24.3% and operating margin is 29.5%, with free cash flow TTM of $11.9B. The company generates substantial cash, enabling investment in content and potential buybacks, with ROE at 41.3%.
- Attractive Forward Valuation: Forward PE is 20.5x versus trailing PE of 36.3x, implying expected EPS growth of over 40%. PEG ratio of 1.34x suggests reasonable pricing relative to growth, and the stock trades 38% below its 52-week high.
- Analyst Consensus is Buy: 45 analysts rate NFLX a Buy with a mean rating of 1.76 (1=Strong Buy). Average price target is $93.66, implying 19.7% upside from the current price of $78.25, with a high target of $135.
Bearish
- Severe Stock Underperformance: NFLX is down 37.8% over the past year, versus the S&P 500's +18.7% gain. The stock is near its 52-week low of $65.08, reflecting persistent bearish sentiment and significant underperformance relative to the market.
- Intense Competitive Pressure: YouTube's ad revenue reached $11.06B, rapidly approaching Netflix's total revenue, and traditional media are launching competing services. This intensifying competition threatens subscriber growth and pricing power.
- High Valuation on Trailing Earnings: Trailing PE of 36.3x is elevated, and the stock trades at a premium to the market. If growth decelerates, the multiple could compress, leading to further downside.
- Subscriber Growth Maturation: In mature markets like the US, subscriber growth is slowing, and the company increasingly relies on price increases and ad-tier adoption. This could limit long-term revenue growth potential.
NFLX Technical Analysis
Netflix is in a pronounced downtrend, with the stock down 37.8% over the past year, significantly underperforming the S&P 500's +18.7% gain. The current price of $78.25 sits near the lower end of its 52-week range, at approximately 18% above the low of $65.08 and 38% below the high of $126.71, indicating persistent bearish sentiment. This positioning near the lows suggests the market is pricing in substantial negative expectations, but also presents a potential value opportunity if fundamentals stabilize.
Beta
1.53
1.53x market volatility
Max Drawdown
-46.5%
Largest decline past year
52-Week Range
$65-$125
Price range past year
Annual Return
-35.7%
Cumulative gain past year
| Period | NFLX Return | S&P 500 |
|---|---|---|
| 1m | +4.3% | -1.1% |
| 3m | -3.7% | +3.0% |
| 6m | -18.8% | +15.4% |
| 1y | -35.7% | +16.2% |
| ytd | -14.9% | +12.1% |
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NFLX Fundamental Analysis
Netflix's revenue growth remains robust, with Q1 2026 revenue of $12.25 billion, up 16.2% year-over-year, accelerating from the 14.9% growth seen in Q4 2025. This marks the fourth consecutive quarter of double-digit growth, driven by continued subscriber gains and price increases. The company's diverse content slate and ad-supported tier are key growth drivers, though competition from YouTube and traditional media poses a threat. The strong revenue trajectory supports the investment case, but deceleration in subscriber growth in mature markets remains a watch item.
Quarterly Revenue
$12.2B
2026-03
Revenue YoY Growth
+16.2%
YoY Comparison
Gross Margin
51.9%
Latest Quarter
Free Cash Flow
$11.9B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is NFLX Overvalued?
Given Netflix's positive net income, the PE ratio is the primary valuation metric. The trailing PE stands at 36.3x, while the forward PE is 20.5x, indicating the market expects significant earnings growth. This gap implies a forward earnings growth rate of over 40%, which is optimistic but supported by recent EPS expansion. The PEG ratio of 1.34x suggests the stock is reasonably priced relative to its growth rate, though it is not a deep value.
PE
36.3x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 14x~57x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
13.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include a debt-to-equity ratio of 0.54, which is manageable but not negligible, and a current ratio of 1.19, indicating adequate liquidity. The company's net margin of 24.3% is strong, but it faces margin pressure from content investments and competition. Revenue concentration is a risk as streaming is the primary business, and any slowdown in subscriber growth or pricing power could impact earnings. The stock's high beta of 1.51 amplifies market volatility, and the 46.5% max drawdown over the past year highlights significant downside risk.