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By Danny Vena, CPA–Jul 10, 2026 at 2:42PM EST
+Fool.comon Share
Summarize with AI
Key Points
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Netflix stock has plunged over the past year, down 42% from its peak.
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You might be tempted to think the business is in trouble, but the evidence tells a different story.
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Netflix's upcoming financial report will mark a key test for the highflier.
Streaming video has come a long way since it was pioneered by Netflix( NFLX 2.78%) nearly two decades ago. Little did the company know when it launched its "Watch Now" service in 2007 -- as an add-on for its DVD-by-mail customers -- that it would be giving birth to a new industry. Since then, Netflix has become the world's largest subscription video streaming service.
Over the past year, however, the stock has taken in on the chin, down 42% from its peak in July 2025. There wasn't a single catalyst that weighed on the streaming pioneer, but rather a sequence of events that have served to confuse and frustrate investors.
The company faces a key hurdle when Netflix reports its second-quarter results after the market close on July 16. Given the stock's slump over the past year, is it finally time to buy Netflix ahead of earnings, or is there more pain to come? Let's dig in to see what the evidence suggests.
Image source: The Motley Fool.
What's happening with Netflix?
The past year has been rife with uncertainty for Netflix investors.
The company's bid to buy the streaming and studio assets of Warner Bros. Discovery was scuttled by a higher bid from rival Paramount Skydance. Netflix refused to participate in a protracted and costly bidding war and walked away from the deal. As the company has shown so many times over the years, it's unwilling to overpay for content, and its decision was the right move, in my opinion.
Soon after, Netflix reported that founder and former CEO Reed Hastings had decided to step down from the board after nearly 30 years with the company. The loss of any C-suite executive can be cause for concern, and Hastings has become an institution. That said, longtime executives Ted Sarandos and Greg Peters have been running the company as co-CEOs for more than three years, so Hastings is leaving the company in experienced hands.
Netflix has also been pummeled by events unrelated to its operations. Just last month, Fox Corporation announced plans to acquire streaming pioneer Roku in a cash-and-stock deal valued at $22 billion. While this marriage had nothing to do with Netflix, rumors surfaced that Netflix had been "outbid" for Roku -- which the company disputed, saying it hadn't even submitted a bid.
Just days later, rumors surfaced that the company was looking to acquire Lionsgate Studios, a report the company flatly denied. By then, however, the popular narrative had taken over, suggesting that the multiple failed acquisition attempts showed Netflix lacked a clear growth strategy -- even though the company hadn't bid for either Roku or Lionsgate.
Simply put, this has all been much ado about nothing.
Expand
NASDAQ: NFLX
Netflix
Today's Change
(-2.78%) $-2.10
Current Price
$73.37
Key Data Points
Market Cap
$318BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Market cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.
Day's Range
$72.51 - $75.70
52wk Range
$70.86 - $127.75
Volume
46.1M
Avg Vol
41.9M
Gross Margin
49.44%
Paint by numbers
Despite the rumors to the contrary, Netflix's growth is chugging along. In the first quarter, Netflix generated revenue of $12.25 billion, an increase of 16%, while its earnings per share (EPS) jumped 86% to $1.23. The jump in net income was partially due to the $2.8 billion termination fee it received from Warner Bros.
Netflix maintained its full-year revenue growth forecast at about 13% at the midpoint, as well as projecting a doubling of its advertising revenue from $1.5 billion to $3 billion. Management also noted that content expenses would be weighted toward the first half of the year. Netflix has historically issued conservative guidance, so I don't see this as any cause for concern.
The real opportunity, in my opinion, is Netflix's strikingly low valuation. The stock is currently selling for 24 times earnings, marking only the third time in the past 15 years that Netflix has been this cheap.
That allows savvy investors to buy Netflix before investor sentiment improves and the stock begins to recover. July 16 could be that day.
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About the Author
Danny Vena, CPA, is a contributing Motley Fool technology analyst specializing in artificial intelligence, cloud computing, semiconductors, software, cybersecurity, and consumer electronics. He is a Certified Public Accountant and previously worked as a controller and accountant across small and midsize businesses. Danny also served 13 years in the U.S. Army. He holds a bachelor’s degree in accounting from the University of Phoenix.
Stocks Mentioned
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Netflix\
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NASDAQ: NFLX\
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$73.39\
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(-2.76%)-$2.09
Motley Fool Stock Advisor’s Latest Pick
---% Avg Return
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Roku\
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NASDAQ: ROKU\
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$140.68\
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(+0.30%)+$0.42 
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Fox\
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NASDAQ: FOXA\
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$54.12\
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(+0.71%)+$0.38 
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Fox\
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NASDAQ: FOX\
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$48.75\
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(+0.64%)+$0.31 
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Warner Bros. Discovery\
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NASDAQ: WBD\
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$26.59\
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(-0.15%)-$0.04 
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Paramount Skydance\
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NASDAQ: PSKY\
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$9.41\
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(+0.86%)+$0.08 
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Lionsgate Studios\
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NYSE: LION\
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$13.47\
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(-0.15%)-$0.02
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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