Down 25%, Is It Finally Time to Buy Netflix (NFLX) Stock?
2026-07-28 22:15
•Selena Maranjian •The Motley Fool
•• •••• Axe Capital view
Netflix's 25% Dip: Opportunity or Trap?
Netflix’s share price is down sharply but strong earnings point to a buying window—if you believe the streaming war’s rules won’t change.
Netflix’s stock has taken a beating this year, down 25% despite solid growth numbers and a 21% share of the US streaming market. The company's price-to-earnings ratio of 22 is much cheaper than its usual 31, suggesting the market may be overreacting. But there is a catch: Netflix relies heavily on subscriber price increases, while viewer retention between seasons has shown cracks. For South African investors, there’s no direct JSE link, so the rand’s strength versus the dollar (USD/ZAR) matters. A stronger rand could dampen Netflix profits when converted back, while a weak rand makes it more expensive to hold US stocks. Given Netflix’s stubborn position and the streaming sector’s unpredictability, this isn’t a slam-dunk buy. If US tech starts losing steam more broadly, Netflix could slide further. But if you’re willing to accept some volatility, Netflix could be a decent entry point at these valuations. this is just my opinion and not financial advice
I would watch USD/ZAR closely and consider a small position in Netflix, trimming if the rand weakens sharply or streaming competition intensifies.
- NFLX
- USD/ZAR
- Increased subscriber churn impacting growth
- Rand strength compressing dollar returns
5/10
Netflix stock has declined 25% in 2026 despite a 21% average annual gain over 15 years. The streaming giant maintains a strong market position with 21% U.S. market share, posted 13% revenue growth and 9% net income growth in Q2, and trades at attractive valuations (P/E ratio of 22 vs. 5-year average of 31). However, concerns include viewer loss between seasons and potential over-reliance on price increases for growth.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Selena Maranjian
Categories: Equities, Earnings
Tickers: NFLX, AMZN, WBD, ROKU
Sentiment: Positive - Stock is down 25% but trading at attractive valuations (P/E of 22 below 5-year average of 31), strong Q2 earnings growth (13% revenue, 9% net income), disciplined management with share buybacks, and dominant market position with 21% U.S. streaming share. Mentioned as a competitor with Prime Video holding 22% U.S. streaming market share, slightly ahead of Netflix. No specific performance data or analysis provided.
Keywords: Netflix stock valuation, streaming market share, stock buybacks, viewer retention, price increases, Q2 earnings
Insights:
- NFLX: Positive: Stock is down 25% but trading at attractive valuations (P/E of 22 below 5-year average of 31), strong Q2 earnings growth (13% revenue, 9% net income), disciplined management with share buybacks, and dominant market position with 21% U.S. streaming share.
- AMZN: Neutral: Mentioned as a competitor with Prime Video holding 22% U.S. streaming market share, slightly ahead of Netflix. No specific performance data or analysis provided.
- WBD: Neutral: Mentioned as a company Netflix walked away from in a deal negotiation, demonstrating Netflix's management discipline. No direct impact on this company analyzed.