Netflix shares down 38% as analysts stay bullish

Shares of Netflix have declined sharply from their all-time high last year, trading near $82 this week, even as the company's underlying business performance and financial outlook remain robust. The stock's price, which opened Tuesday at $82.64, is down more than 38 percent from its peak of $134.12 in June 2025.

This valuation disconnect comes despite strong first-quarter results for 2026. The company reported revenue of $12.25 billion, a 16.2 percent year-over-year increase that exceeded analyst forecasts. Earnings per share of $1.23 also significantly outpaced expectations. The company's free cash flow on a trailing twelve-month basis reached $11.89 billion, prompting management to raise its full-year free cash flow guidance to approximately $12.5 billion.

A key driver of growth is the company's advertising-supported subscription tier, launched in November 2022. The advertiser base grew over 70 percent year-over-year, now exceeding 4,000 partners. Management expects advertising revenue to roughly double throughout 2026, approaching $3 billion. Company data indicates that about 65 percent of subscribers choosing the ad-tier over the past two years were entirely new to the...