Netflix, Inc.NASDAQ:NFLX
Published 2026-07-19, with market data as of the 2026-07-17 close. All figures are sourced from Netflix's official Q2 2026 report (Form 10-Q, filed 2026-07-17) and its earnings call.
Netflix is the only streaming company consistently profitable at global scale: Q2 revenue $12.56B (+13.4% YoY), a 33.4% operating margin, $0.80 EPS, and double-digit growth across all four regions.
But after the July 16 print, softer-than-expected Q3 guidance sent the stock down about 9% to $67.63 — below every analyst target (the lowest is $70). We rate it Buy, with a 12-month target of $88, about 30% above the current price.
§01Investment Summary
For Netflix, the core question today is not whether streaming can still grow, but what multiple the market should pay for it — a scaled streaming leader that has decelerated from hypergrowth to steady double digits while its profitability keeps structurally improving. We cross-check four methods — P/E, EV/EBITDA, free-cash-flow yield, and a haircut to Street targets — to a 12-month price target of $88. The sell-off was triggered only by Q3 guidance modestly below expectations, not by a break in fundamentals.
Four reasons to buy: operating margin has risen four years running (20.6% toward this year's 31.5% goal); free cash flow keeps expanding; ad revenue should roughly double to the $3B level in 2026; and the company is buying back shares at a record $4.7B in a single quarter while the price is low.
Three main risks: slowing growth; content spend accelerating and squeezing near-term free cash flow; and elevated rates weighing on the multiple of a long-duration grower.
§02Price and Street View
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