Netflix Stock Price Forecast: Is NASDAQ:NFLX Mispriced Around $80?

Netflix Stock (NASDAQ:NFLX) – High-Margin Giant Trading Like A Problem Name Around $80

Revenue Momentum In NASDAQ:NFLX Versus The Current $80.60 Price

At roughly $80.60 per share, with an intraday range of $79.22–$81.44 and a 52-week range of $79.22–$134.12, NASDAQ:NFLX is priced as if its growth story has stalled. The latest numbers show the opposite. Q4 2025 revenue reached about $12.05–$12.10 billion, translating into roughly 17.6–18% year-on-year growth and around 4.7% sequential growth. This is the strongest revenue acceleration seen in roughly seven quarters and came with a beat of about $84 million versus analyst expectations, which confirms the top line is not drifting; it is re-accelerating.
Engagement is backing those figures. In the second half of 2025, members watched 96 billion hours on the platform, up 2% year on year, compared with only 1% growth in the first half. Viewing of originals grew around 9% in H2, showing that the content Netflix owns and controls is pulling more time and attention. That is exactly where the economic leverage is.
Full-year 2025 revenue grew about 16%, and management is guiding to roughly 15.3% growth for Q1 2026 and a midpoint near 13% for full-year 2026. On paper that is a slowdown, and that softer forward guide is what the market is punishing. The stock is down close to 30% over three months, but the income statement is not collapsing. The discount is coming from sentiment, not from a structural break in the business model.

Operating Margin, EPS Leverage And Cash Flow Strength In NFLX

Beneath the revenue line, the profitability profile of NASDAQ:NFLX is moving into a different tier. Q4 2025 operating margin came in around 24.5%, roughly 230 basis points higher than a year earlier. For the full year, operating margin expanded from close to 18.2% to about 20.0%, showing sustained operating leverage rather than a one-off quarter helped by timing. Management is guiding Q1 2026 operating margin to roughly 32.1%, around 40 basis points above last year, and they are targeting a full-year 2026 margin band in the 29.5–31.5% range. This is no longer a low-margin growth story; it is a high-margin global platform with room to keep tightening efficiency.
Earnings per share are following that margin trajectory. Q4 diluted EPS landed at about $0.56, up 31% year on year, outpacing the top line by a wide margin. That acceleration confirms that the drop-through from revenue to earnings is improving as scale increases. Guidance calls for EPS growth to slow toward 15% in Q1 2026, but that still sits on top of expanding margins, which means the quality of the earnings remains high.
Cash flow confirms the strength. Q4 operating cash flow reached roughly $2.11 billion, up 37% year on year, and free cash flow was around $1.87 billion, up 36%. For full-year 2025, free cash flow is running at roughly $6.37 billion, growing almost 30% versus the prior year. That level of cash production comfortably funds content, technology investment and shareholder returns at the same time. In Q4 alone, the company deployed around $2.08 billion into share repurchases, more than double the approximately $964 million repurchased a year earlier, and fully diluted share count dropped to roughly 4.2–4.3 billion. The key point is simple: at the current 31.9x trailing P/E and about 12.7x price-to-book, you are buying a mid-teens growth, roughly 30% margin, multi-billion-dollar free-cash-flow engine at the low end of its own historical valuation band while management is shrinking the equity base with aggressive buybacks.

Balance Sheet Quality, Debt Profile And The Warner Bros. Discovery Overhang

The balance sheet behind NASDAQ:NFLX looks nothing like the stretched media names that struggled in the last cycle. Cash and short-term investments stand around $9.06 billion, down only about 5.4% year on year despite the acceleration in repurchases. Total assets are roughly $55.6 billion, up 3.7%, total liabilities sit near $28.98 billion, up only 0.3%, and equity is about $26.62 billion. Quarterly net income of $2.42 billion is up 29.4%, with net margin just above 20%.
On leverage, net debt to EBITDA is around 0.4x, which is extremely conservative for a business with recurring subscription revenue, pricing power and global reach. Close to 93% of borrowings mature beyond one year, and existing cash can cover more than 60% of total debt. The company could, in theory, retire all net debt in less than a year of EBITDA if it wanted to, which highlights how much flexibility there is to handle content spending, buybacks and any dealmaking.
The proposed acquisition of Warner Bros. Discovery is the big swing idea hanging over the stock. The proposed structure is an all-cash bid around $27.75 per WBD share, with the target trading close to $27.60, which leaves almost no arbitrage spread. Warner Bros. Discovery carries about $33.5 billion of borrowings, and on current numbers trades near a forward 71x P/E, which means NASDAQ:NFLX is not buying a bargain multiple; it is buying IP and distribution.
If you crudely combine the two capital structures, total borrowings for the combined entity would land around $48.0 billion, cash around $13.4 billion, and net debt approximately $34.6 billion. Using $13.7 billion of EBITDA, that implies a combined net debt to EBITDA ratio of about 2.5x. That is perfectly manageable for a subscription platform but a meaningful change from 0.4x. The upside is obvious: exclusive access to DC, HBO and the HBO Max catalogue would deepen the moat around premium TV and film, add more levers on pricing and bolster the global library.
The real obstacle is not financial; it is regulatory. Communications regulators in the US have already signaled competition concerns. In the UK, politicians are pushing for full review by the competition authority, and filmmakers plus smaller theaters are lobbying state attorneys general to block the transaction. The risk is binary and not trivial. A realistic base case has to assume a meaningful probability that the deal is delayed, restructured or blocked entirely. From an equity standpoint, the important point is that the current NASDAQ:NFLX business model, with its existing slate and library, is working well enough that the stock is a viable long even if the entire Warner Bros. Discovery story disappears.

Competitive Position, Pricing Power And Engagement Leadership Of Netflix Stock

Competitive pressure in streaming is real and constant. NASDAQ:NFLX is up against Amazon Prime Video, Disney+, Apple TV+ and a growing set of regional players. Each of those can spend aggressively and bundle content with other services. The reason Netflix stock still deserves a premium multiple is that scale, engagement and brand equity continue to separate it from the pack.
At the end of 2025, the platform had around 325 million subscribers, up from 300 million at the end of 2024, an 8% increase on an already massive base. Large population surveys show that about 55% of US respondents subscribe to Netflix, versus 51% for Amazon Prime and lower penetration for the rest. That gives the company both breadth and depth in its core developed markets.
On viewing, the dominance is even more pronounced. In October 2025, eight of the ten most-streamed TV shows in the United States were hosted on the platform. One flagship series delivered roughly 224.6 million views from 41.7 million unique viewers, demonstrating blockbuster pull. Another series with only 5.5 million viewers registered around 30 views per viewer, which shows how strong repeat viewing and loyalty can be when a show connects. In the UK, the picture is similar, with series like The Big Bang Theory and Brooklyn Nine-Nine logging roughly 45 and 35 views per viewer, tapping into nostalgia and comfort-watching.
This engagement profile is what underpins pricing power. In the US, standard plans moved from about $15.49 to $17.99 per month. Despite that, demand has held, and survey data shows that when subscribers think about cutting services, Netflix is not at the top of the list. Another major platform faces potential losses of around 44% of its domestic subscribers if it pushes price too aggressively, which highlights the difference in perceived value.
The content slate is reinforcing the advantage. The final season of Stranger Things, film launches like Frankenstein, and the incoming Bridgerton Season 4 and Avatar: The Last Airbender Season 2 show how the company feeds both new IP and established franchises. H2 2025 originals generated roughly 9% viewing growth, which is exactly where margin leverage is strongest because those titles are owned, not rented.
Internationally, there is still work to do. Piracy, local streaming ecosystems and regulatory constraints make parts of Asia-Pacific slower to penetrate, and APAC remains the smallest region. But global data-center build-out, improved broadband penetration and wider adoption of digital payments are steadily opening those markets. Netflix is positioned to benefit as infrastructure catches up and its localized content strategy matures.

Macro Backdrop, Inflation Pressures And Execution Risks Around NASDAQ:NFLX

The macro environment explains some of the multiple compression for NASDAQ:NFLX, but it does not justify the full magnitude of the selloff. Inflation in the United States has cooled but not vanished, with recent prints around 2.7%, just under a 14-month peak of 3.0%. A large study shows the average American spends approximately $552 per year on streaming subscriptions, and roughly 90% say they would cut services if prices keep climbing. That is a direct cap on pricing freedom across the sector and a clear reminder that Netflix cannot be too aggressive too quickly.
Competitive risk remains elevated. The company has to fight for attention against the deep pockets of Amazon, Disney and Apple, any of which can decide to fund a slate of prestige shows or aggressive promotions that temporarily tilt the battlefield. A single surprise hit on a rival service can soak up viewing hours for months. Maintaining lead time on content quality, breadth and user experience is non-negotiable.
There are also regional execution risks. In countries where piracy is entrenched and domestic platforms have first-mover advantages, acquisition costs are higher and regulatory constraints are tighter. Winning in those markets requires careful localization of content, partnerships with local distributors and customized billing solutions, all of which take resources and time.
The Warner Bros. Discovery process adds another layer of complexity. Even if the deal does not close, the long public debate around competition, media concentration and platform power can weigh on sentiment. If it does close, management will have to handle the integration of a highly leveraged traditional media asset into a streaming-first tech stack without diluting focus on the core service.
On the positive side, the global rate environment is turning more supportive. The US central bank has already reduced policy rates by about 75 basis points in the current easing cycle. Lower rates support employment, wages and risk appetite, which makes discretionary spending more resilient than it would be in a tightening environment. For Netflix’s own capital structure, lower rates also reduce the cost of any variable-rate borrowings and future refinancing, providing an incremental tailwind to net income and free cash flow.

Valuation, Technical Setup And Stance On Netflix Stock (NASDAQ:NFLX) Around $80

The current valuation of Netflix stock does not match the fundamentals. At $80.60, NASDAQ:NFLX trades at roughly 31.9x trailing earnings, with forward multiples in the mid-20s and a price-to-book near 12.7x. The five-year average P/E sits around 37.6x, so the name is clearly below its own historical center of gravity. If you apply that average multiple to updated EPS, you get a fair-value region around $95 per share. Applying a 5–10% haircut to reflect WBD uncertainty and sector volatility still produces a conservative target range roughly in the $90–91 band, which is about 12–15% above the current price. Re-rating back to the full historical multiple without a haircut would imply closer to 18–20% upside.
Technically, the chart explains why the opportunity exists. Over the last three months, NASDAQ:NFLX has dropped about 30%, carving a pattern of lower highs and lower lows. The stock now trades below both the 50-day and 200-day moving averages, with the 50-day average trending downward, signaling weak momentum and defensive positioning by funds. MACD and its signal line are almost overlapping and the histogram is near neutral, which suggests that aggressive selling has faded and buying interest is beginning to meet it. The relative strength index has moved into oversold territory, confirming that the latest leg down has pushed price well below what the fundamentals would warrant and hinting at a developing support zone in the high-70s to low-80s area.
Combine all the pieces and the picture is clear. You have a platform with roughly 17–18% revenue growth in the latest quarter, guidance for mid-teens growth this year, operating margins marching toward 30%, EPS growing in the mid-teens or better, more than $6 billion of annual free cash flow, a pre-deal leverage ratio of 0.4x, a dominant global engagement footprint and meaningful pricing power. Against that, you have regulatory noise around Warner Bros. Discovery, real but manageable competition, and consumer sensitivity to subscription pricing in a still-inflationary environment.
At approximately $80–81 per share, the market is pricing Netflix stock (NASDAQ:NFLX) as if the growth engine is stalling and the Warner Bros. Discovery saga is a structural threat, not an option. The data say otherwise. With the existing business throwing off cash, shrinking the share base and maintaining leadership in engagement and content, current levels are more consistent with an entry zone than with a name to avoid. 

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