Netflix Has Fallen More Than 40% 7 Times in Its History. Here's What Happened Next Each Time.
Key PointsThe streaming giant's stock has seen enormous volatility over the years since its initial public offering in 2002.
Over the past seven times Netflix's share price has fallen more than 40%, the stock has recovered and delivered impressive returns. In 2004, Netflix's share price plummeted 71% after its IPO, but it then surged 725% over the next year. In 2011, shares dropped 56% from a record high, only to triple in value over the following year.
In 2018, Netflix's stock slipped 44% during a prolonged period of time, but it recovered 42% by Christmas Eve. In 2021, the stock fell 76% from the end of October to early May, but it then climbed 107% over the next 12 months. Investors should consider that Netflix currently appears to be a value stock with a forward price-to-earnings ratio of 25.8, which is historically cheap.
However, intense competition in the streaming industry is reducing the catalyst that drove past gains. Despite a current decline, Netflix has historically recovered and generated significant returns in the following year.
Written by urgent.news from Yahoo Finance's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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