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Netflix, Inc. (NFLX) stock analysis

Netflix slides to a new 52-week low after earnings as analysts trim targets and growth stays solid

Netflix closed at 62.52 on Oct 27, 2026, at its 52-week low and 46.44% below its 52-week high, after a 6.89% post-earnings drop on Oct 20. Revenue growth of 14.65% and a 33.97% ROIC sit alongside a forward P/E of 16.62, below the industry median of 23.48. Analysts remain at a Buy consensus but cut several targets and issued downgrades.

Price: 62.52
Market Cap (USD): $258.49B
P/E: 17.50×
Fwd P/E: 16.62×
Div Yield: 0.00%
1Y Return: -42.89%
Next Earnings: Jan 19, 2027
Mean Target: 86.77
Rating: Buy

Bull case

Fundamentals are strong: trailing revenue is $49.73B with an operating margin of 31.30%, and ROIC of 33.97% is in the 97th percentile of US Communication Services.
Valuation has compressed: forward P/E is 16.62 (on next fiscal year's consensus), 29.24% below the industry median of 23.48, and free cash flow yield is 4.40%.
Analysts' mean target is 86.77, 38.79% above the price, with a Buy consensus (62 Buy, 31 Hold, 7 Sell) as of Oct 28, 2026.

Bear case

Momentum is very weak: the stock is down 33.32% year to date and 42.89% over one year, with a relative strength rating of 13 and a death cross dated Dec 5, 2025.
The stock has fallen after each of the last five earnings reports shown through Oct 20, 2026 (latest -6.89%) despite beats, and news headlines cite engagement worries.
Analyst sentiment is slipping: Wolfe Research (Oct 22) and Needham (Oct 21) downgraded, Argus cut its target from 120 to 95, and 13 insider sales were recorded over 90 days with no buys.

What to watch

Next earnings on Jan 19, 2027 after the close (84 days away); consensus EPS is 0.68.
Whether the stock holds the 52-week low of 62.48 set in the Oct 27 session.
Reclaim of the 20-day average at 68.50 and 50-day average at 73.71 would ease the downtrend; the 200-day average is at 82.01.
Short interest (86.0M shares, 2.08% of float as of Oct 15, 2026) for changes after the earnings drop.

General

Netflix is a global streaming entertainment provider whose shares have fallen sharply despite rising revenue and profit. The market is pricing a lower multiple, while analysts still lean positive but have trimmed targets.

Business

Per its profile, Netflix offers series, films, documentaries and mobile games to roughly 222 million paying subscribers across 190 countries, plus a US DVD-by-mail service. Trailing revenue is $49.73B, and quarterly revenue grew 11.85% year over year in the latest quarter (Q3 FY2026: $12.87B).

Valuation

The trailing P/E is 17.50 and the forward P/E is 16.62 on next fiscal year's consensus, against an industry median of 23.48. Price-to-sales of 5.20 is in the 82nd percentile of the sector, so it is cheaper on earnings than on sales.

Market and analyst signals

The stock is 23.76% below its 200-day average and sits at a 52-week low. Analysts' mean target is 86.77 across 28 analysts, but Oct 21-22 brought downgrades from Needham and Wolfe Research and several target reductions, including UBS and Piper Sandler.

Long-term investor

Netflix has compounded revenue and earnings with high returns on capital and a modest balance sheet. The debate is growth durability, as consensus EPS growth slows to 4.65% next year while the multiple has compressed.

Growth and margins

Revenue rose from $25.00B in fiscal 2020 to $45.18B in 2025, with a 5-year CAGR of 12.57%. Operating margin is 31.30%, up 2.15% over a year, and diluted EPS grew from 1.20 in 2023 to 2.53 in 2025. Revenue has risen for 15 straight quarters.

Returns and balance sheet

ROIC is 33.97% and ROE is 53.46%. Total debt is $15.13B against cash of $8.19B, with net debt to EBITDA of 0.19 and interest coverage of 18.17. The current ratio is 1.07.

Capital return and sentiment

Buybacks were $9.13B in fiscal 2025, shares outstanding fell 3.35% over a year, and no dividend is paid. Insiders sold 13 times over 90 days (net -14.3M) with no buys; institutions hold 81.27%.

Swing trader

The trend is firmly down, with price below all key averages and at a 52-week low. Oversold readings raise bounce potential, but there is no base yet and volatility is high.

Trend and momentum

Price of 62.52 is below the 20-day (68.50), 50-day (73.71) and 200-day (82.01) averages. RSI is 31.13, the short-term RSI2 is 8.11, MACD is below its signal, and ADX is 26.97, indicating a trending market. Return over 5 days is -8.98%.

Recent sessions and levels

The stock fell from 72.61 on Oct 15 to 62.52, with 101.4M shares traded on Oct 21 after earnings. Oct 27 closed at the 52-week low of 62.48 intraday area. Resistance sits near the 20-day high of 73.07 and the 20-day average of 68.50.

Risk and flows

ATR is 2.13, or 3.40% of price. Price is below the lower Bollinger band (63.35). Short interest rose 4.64% to 86.0M shares (2.08% of float) as of Oct 15. Four upgrades and five downgrades were counted over 30 days.

Options

Implied volatility has dropped after earnings and sits slightly below realized volatility. Liquidity is excellent, and the term structure is in contango.

Volatility level

30-day implied volatility is 30.33%, down 15.2 points over five days, with an IV rank of 55 but an IV percentile of 12. Implied is below 30-day realized volatility of 34.03% (ratio 0.89), so premium is not rich relative to recent movement.

Term structure and expected moves

IV is 33.30% at 60 days and 35.25% at 90 days, a contango slope of +4.9 points. Skew is -1.4 points. The 30-day expected move is 8.70% (5.44), and the 7-day expected move is 4.20%. The next earnings date, Jan 19, 2027, falls outside the 30-day expiry.

Premium and liquidity

For the Nov 27, 2026 expiry (31 days), the 30-delta put at 60.00 pays 1.03, an annualized cash-secured yield of 20.21%. The 30-delta call at 66.00 pays 1.02, a covered call yield of 19.21%. Options volume is 453.0K, the liquidity score is 100, and the put/call volume ratio is 0.52.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.