Netflix shares have fallen 41% over the past 12 months and 26% year-to-date in 2026, pushing its price-to-earnings ratio to 21 times earnings, the lowest level in four years. The sell-off was partly driven by investor concerns over a failed bid to acquire Warner Bros. Discovery, which some saw as too expensive and difficult to integrate, while others later worried about losing a transformational deal. Revenue growth has decelerated, with second-quarter growth of 13% year over year and third-quarter guidance implying 12% growth, while the full-year 2026 revenue forecast was narrowed to a range of $51 billion to $51.4 billion. Operating margins, however, are rising, reaching 33% in the second quarter, and the company expects to double advertising revenue to $3 billion in 2026, with free cash flow projected at $12.5 billion. Wall Street remains bullish, with 68% of analysts rating the stock a buy and a median price target of $94.50, implying a potential 37% return over the next 12 months.
Netflix IncStock down 41% in a year, valuation at four-year low, but analysts bullish with 68% buy rating and 37% upside potential.
Warner Bros Discovery IncNetflix's failed bid to acquire Warner Bros. Discovery is mentioned as a concern for Netflix, implying WBD was a target but deal fell through.
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