Key Takeaways
- Netflix stock is down 32% in 2026, and a report that members are watching less has kept the sell-off going since its Oct. 20 earnings report.
- Angel investor Jason Calacanis bought 3,000 shares at $63 and set a 12-month target of $90.
- With about $12 billion of free cash flow expected this year, Netflix looks cheap at 17x forward earnings, about half its five-year average.
- The risk is engagement: viewers are drifting to Alphabet’s YouTube, revenue growth has slowed all year, and January’s 2027 guidance is the next test.
Netflix (NFLX) stock is down 32% in 2026, and the sell-off that followed its Oct. 20 earnings report still hasn’t let up.
The latest blow came from Bloomberg, which reported on Oct. 25 that members open the app on fewer days a month than they did a couple of years ago. Viewing time has been drifting to YouTube, owned by Alphabet (GOOG), and investors are treating Netflix like a business in decline.
Joe Carlson, who hosts The Joe Carlson Show, isn’t buying it. In a post on X, he wrote:
> “The first time Netflix was failing it was losing -$3 billion in free cash flow. > > The second time Netflix was failing it had flat free cash flows. > > Now today, the third time Netflix is failing, it’s making $12 billion in free cash flow.”
Jason Calacanis, an early investor in Uber, quoted it on Oct. 27 and added his own verdict: “Netflix is a screaming buy at these levels… just added 3,000 shares.”
A day earlier, he’d posted that he bought 3,000 shares at $63 in what he calls his “fun jaytrading robinhood account,” with a 12-month target of $90.
That’s 43% upside from what he paid.
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Failing businesses don’t look like this
Carlson’s numbers hold up. Netflix went from burning $130 million of free cash flow in 2021 to generating $9.5 billion in 2025.
And management expects about $12 billion in 2026.
The market is pricing that cash flow like it’s about to disappear. After the sell-off, Netflix trades at 17x forward earnings, near the bottom of its five-year range and about half its 33x average.
That makes Calacanis’s $90 target look modest. A year from now, investors will price Netflix on its 2028 earnings, which analysts expect to reach $4.50 a share. At $90, the stock would trade at 20x that. That’s still far below its 33x average and close to the Street’s $89 average target.
Pay the best directors in stock
Calacanis thinks the cure for Netflix’s slump is better content, and he has a plan for getting it:
> “Give Nolan or Nathan $10M to direct their next film AND give them up to $50M in RSUs based on minutes viewed and box office.”
Co-CEO Ted Sarandos all but admitted the hits gap on Netflix’s third-quarter call. Of the U.S., he said, “We had some really solid doubles and triples this year,” while other territories “count on some of those titles being home runs.”
And the cost would be small. Netflix spent $4.8 billion buying back its own stock in the third quarter, so $50 million in stock for an elite director is about 1% of a single quarter’s buyback.
The cash has to hold
Netflix still has to show that viewers will come back. View hours grew just 2% in the first half of 2026, so growth is coming from price increases and ads. Revenue growth has slowed every quarter this year, from 17.6% in the fourth quarter of 2025 to 11.8% in the third. The fourth-quarter guide of 11.5% would make it four in a row.
Analysts expect that slowdown to continue, from 16% growth in 2025 to 13% this year and just under 10% by 2028.
That’s still solid growth, and the Bloomberg report shouldn’t move those estimates much. Members are watching less, but they aren’t canceling in droves, and churn improved in the third quarter.
Spending is the bigger threat to the cash. Netflix’s cash payments for content rose 18.5% in the first nine months of 2026, nearly twice the 9.5% rise in content amortization. Calacanis’s star deals would only add to the bill.
My take: Calacanis is right, and Netflix looks like a buy at these prices. As long as the cash keeps coming, the stock doesn’t need a big rebound in its multiple to reach $90.
Of course, that depends on estimates holding, and analysts’ 2027 earnings estimate is down 4% over the past year. Management says it’s aiming for double-digit revenue growth and a wider margin in 2027, and its guidance in January will show whether it gets there.
So what is Netflix stock actually worth?
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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!
