Key Takeaways
- Netflix stock has lost 45% over the past year, and BMO Capital’s $125 price target implies 82% upside from $68.69.
- Netflix’s revenue growth has slowed every quarter this year, and its third-quarter report cut its 2026 ad revenue outlook to about $2.7 billion from about $3 billion.
- Analysts’ earnings estimates have held up, and the stock trades at 19.8x forward earnings against a five-year average of 32.6x.
- A rebound looks plausible, but BMO’s target implies 36x forward earnings, so the Street’s $91 average target is the likelier destination.
Netflix (NFLX) has lost 45% of its value over the past year (through midday Wednesday), and its third-quarter report only added to the selling.
BMO Capital still sees the stock nearly doubling: its $125 price target sits 82% above Tuesday’s close of $68.69.
A year of slowing growth
Netflix’s revenue growth has slowed every quarter this year, from 17.6% in the fourth quarter of 2025 to 11.8% in the third quarter of 2026. It’s forecasting 11.5% for the fourth.
In mid-October came a shake-up: Netflix’s largest layoffs since 2022 and Peter Rice in as chief content officer, followed by film chief Dan Lin’s exit on Oct. 20.
That evening’s report added a roughly $300 million ad miss. Netflix now expects about $2.7 billion of ad revenue in 2026, down from about $3 billion, and puts it down to a slower rollout of some ad tools.
Co-CEO Ted Sarandos, on the call: “We do need better execution in the U.S.”
Why BMO is sticking with it
BMO analyst Brian Pitz cut his target to $125 from $135 on Oct. 20, ahead of the report, and kept it and his Outperform rating afterward. His takeaway: “Advertising faces product delays, but [the] long-term vision [is] still intact.”
The quarter gives him something to work with. Operating margin hit 34.6%, up from 28.2% a year earlier, churn improved, and Netflix spent $4.8 billion on buybacks, its biggest quarter ever.
TIKR tracks 52 analysts on Netflix. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Netflix, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Netflix’s Analyst Ratings
Does $125 add up?
The rest of the Street has been walking its targets down, with the average falling from $135 a year ago to $91 today…
BMO’s $125 target is just shy of the Street’s high of $126, and the ratings haven’t moved much either, with 35 of the 52 analysts still at Buy or Outperform.
Earnings estimates have held up better than the targets have. Analysts still expect normalized EPS to climb from $2.53 in 2025 to $4.53 by 2028…
Full-year revenue guidance is only 0.2% below its old midpoint, and the 31.5% operating margin is still on track, so nothing in this report makes a case for deep cuts.
That leaves the multiple as the real gap. Netflix trades at 19.8x forward earnings, well below its five-year average of 32.6x…
BMO’s $125 works out to [36x] next-twelve-months earnings. That’s above the five-year average, for a company whose growth has slowed to 12%.
Cheap, but $125 is a stretch
The risk is that U.S. execution and ads don’t improve, and growth keeps sliding.
Still, under 20x earnings for a business growing revenue at double digits, widening margins, and buying back stock at a record pace looks cheap to me. A rebound is plausible. But $125 asks investors to pay above Netflix’s five-year average multiple while growth slows, and the Street’s $91 average looks far more reachable.
The next test comes in January, with Netflix’s 2027 guidance. CFO Spence Neumann says the goal is double-digit revenue growth and wider margins, and a guide that delivers both would make $125 look a lot more reasonable.
So what is Netflix stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Netflix could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
