Explore the latest developments concerning Netflix Stock Is.
Netflix Stock Is Cheap and It Has More Than 70% Upside Potential Here
Netflix (NFLX) shares closed 5.4% higher on Aug. 13 after Bill Ackman's Pershing Square Holdings (PSHZF) disclosed a new stake in the streaming giant. The move added a vote of confidence at a time when NFLX stock is trading well below its peak.
The investment case is straightforward: Netflix has experienced a sharp valuation reset, but its underlying growth and profitability outlook remain strong.
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Netflix Stock Has Fallen On Slowing Sales While Margin And Buybacks Compound Earnings
Netflix’s revenue growth is cooling, and the line that actually compounds for shareholders has been running far ahead of it.
Netflix (NFLX) has lost about 35% of its value over the past year while the S&P 500 gained 21%, and revenue growth has cooled to 13.4% in the second quarter of 2026, the slowest of the last four quarters. The sales line, though, is not the main thing driving Netflix’s per-share earnings.
Over the past three years per-share earnings compounded at about 50% a year, against 14.6% for revenue. Two levers opened that gap, and neither is the top line: an operating margin that traveled from 17.5% three years ago to 23.8% two years ago and 29.7% over the last twelve months, on $48.4 billion of revenue, and a shrinking share count. So the number a shareholder owns can keep compounding while the top line decelerates.
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