Netflix stock has plummeted 41% over the past year amid concerns about declining revenue growth and a failed bid to acquire Warner Bros. Discovery. However, the article argues these concerns are overblown, highlighting Netflix's strong market position, rising operating margins (33% in Q2), growing ad revenue expected to double to $3 billion in 2026, and robust free cash flow of $12.5 billion. With a P/E ratio of 21x (lowest in four years) and 68% of analysts rating it a buy with a median price target of $94.50, the stock could return approximately 37% over the next 12 months.
Axe note: Netflix’s 41% drop looks steep, but the company's fundamentals hint the worst might be behind it.