Key Stats for Netflix Stock
- Past week’s performance: -2.5%
- 52-week range: $75 to $134
- Valuation model target price: $141
- Implied upside: 52.7% over 2.7 years
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What Happened?
Netflix (NFLX) stock fell this week as investors looked past strong Q1 results and focused on softer near-term guidance. The company beat Q1 revenue and profit expectations, but Reuters reported that Q2 EPS guidance came in below analyst estimates. That created a cautious tone because expectations were already high after Netflix’s strong multi-year run.
Netflix reported Q1 revenue of $12.25 billion, up 16.2% year over year. Operating income rose to $4.0 billion, and operating margin improved to 32.3%. Management said results were ahead of guidance because subscription revenue was slightly better than planned.
The stock then got support from capital return news. Netflix authorized an additional $25 billion share repurchase program with no expiration date. Reuters said the new buyback followed the cancellation of Netflix’s Warner Bros. Discovery bid, which had pressured shares earlier.
Investors are now weighing strong execution against slower expected growth. Netflix still expects 2026 revenue of $50.7 billion to $51.7 billion and a 31.5% operating margin. The key question is whether advertising, pricing, and engagement can keep earnings growing going forward.
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Is Netflix Stock Undervalued?
Under valuation model assumptions realized through 12/31/28, the stock is modeled using:
- Revenue growth (CAGR): 11.9%
- Operating Margins: 34.7%
- Exit P/E Multiple: 27.8x
Based on these inputs, the model estimates a target price of $141, implying 52.7% total upside from the current share price and a 17.0% annualized return over the next 2.7 years.
That return profile looks attractive because Netflix is still expanding margins. LTM revenue is $46.9 billion, gross margin is 49.0%, and EBIT margin is 29.7%. This means more revenue is converting into operating profit as content, pricing, and scale work together.
Netflix trades at 27.8x next-twelve-month earnings. That is below its 10-year historical P/E of 68.5x, but the business is also more mature today. The valuation depends on steady double-digit revenue growth and continued margin expansion.
The average street target price is $114, which is below the valuation model target but above the current share price. That shows analysts still see upside, but not as much as the model. The gap likely reflects concern around Q2 guidance and how much growth advertising can add.
What’s Driving NFLX Stock Going Forward?
Advertising is one of the biggest growth drivers. Netflix said it still expects advertising revenue to roughly double in 2026. That matters because ads can increase revenue per viewer without relying only on subscription price increases.
Pricing remains another key lever. Netflix has already shown it can raise prices while keeping engagement strong. If churn stays low, price increases can flow directly into revenue and margin growth.
Content efficiency will also drive the stock. Netflix must keep viewers engaged while managing content spending. That balance matters because content amortization is one of the highest costs in the business.
Capital returns could support earnings per share. The new $25 billion buyback gives Netflix another tool to reduce share count over time. If free cash flow stays strong, buybacks can help offset slower revenue growth going forward.
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Should You Invest in Netflix?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up NFLX, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track NFLX alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
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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 stocks mentioned. Thank you for reading, and happy investing!
