Netflix Is Down 40% From Its All-Time High. With No More Subscriber Numbers to Hide Behind, Is the Stock Still a Good Value?
The streaming media leader is still growing faster than its industry rivals.
Netflix's stock price plummeted 40% from its all-time high of $133.91 on June 30, 2025, to around $80 today. This decline followed the company's decision to stop reporting subscriber numbers in early 2025, a metric that many investors had relied upon. Despite this change, Netflix claimed that revenue, operating margin, and free cash flow (FCF) had become more reliable metrics for evaluating its business.
In the first half of 2026, revenue growth slowed as the benefits of its cheaper ad-supported tier, overseas expansion, and hit shows like Stranger Things waned. Operating margins remained steady, but fluctuating costs led to more volatile free cash flow and earnings per share (EPS). The company's $2.8 billion breakup fee for abandoning its $68 billion bid for Warner Bros.
Discovery in February boosted its financials in the first quarter of 2026. Analysts predict Netflix's revenue will increase 13%-14% in 2026, with operating margins expanding by 200 basis points to 31.5%. Stock price now trades at 25 times forward earnings, which is not a bargain but is attractive considering near-term growth. Analysts forecast a 42% increase in EPS.
Netflix still exhibits growth potential with its revenue expected to rise 13%-14% in 2026, and its operating margin expanding by 200 basis points to 31.5%. Despite the 40% drop from its all-time high, Netflix could be a valuable investment for long-term investors, though it may not be a top pick according to Motley Fool Stock Advisor.
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