Down 25%, Is It Finally Time to Buy Netflix (NFLX) Stock?
Netflix (NFLX +2.85%) has averaged annual gains of 21% over the past 15 years. But in 2026, shares are down 25%. Is this a good opportunity to invest in Netflix?
Image source: The Motley Fool.
Why invest in Netflix?
Netflix is a streaming powerhouse, along with Amazon‘s Prime Video service. Per Evoca.tv, Netflix’s recent U.S. streaming market share was 21%, vs. 22% for Amazon Prime Video. The company has boasted that “We are entertaining over half a billion people in more than 190 countries and 50 languages…”
Today’s Change
(2.85%) $2.01
Current Price
$72.41
Key Data Points
Market Cap
Day’s Range
$71.25 – $73.75
52wk Range
$65.08 – $126.71
Volume
1.9M
Avg Vol
43.1M
Gross Margin
49.53%
In its second quarter, Netflix posted revenue rising 13% year over year and net income up 9%. The company has been broadening its offerings, too, with live sports broadcasts, games, and podcasts.
Netflix’s shares seem reasonably valued at recent levels, with a forward-looking price-to-earnings (P/E) ratio of 22, below its five-year average of 31. Its recent price-to-sales ratio of 6.1 is also below its average of 6.5.
A final plus is management discipline, as Netflix has walked away from some big deals, such as those with Warner Bros. Discovery and Roku, after choosing not to match the winning bids from Paramount Skydance and Fox, respectively. A company with less regard for shareholder value might have kept bidding. Netflix’s management has also been buying back millions of shares — 13.5 million in the last quarter — which rewards shareholders. Why might you not invest in Netflix?
Of course, there are some concerns to consider. There have been reports of Netflix losing viewers between seasons of various shows due to too long a wait for the next season. Also, some worry that it’s relying on price increases for growth more than it should. Be sure to look at the whole picture before deciding whether to invest in Netflix.
Selena Maranjian has positions in Amazon, Netflix, and Warner Bros. Discovery. The Motley Fool has positions in and recommends Amazon, Netflix, Roku, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
