Netflix’s shares have tumbled 32% from their mid-2025 highs, offering investors a rare chance to acquire the world’s leading streaming service at a steep discount. Since its 2002 debut, the stock has surged more than 84,000%, and history suggests this correction may be temporary. Despite the pullback, Netflix retains over 300 million paying subscribers globally and continues to leverage its scale and profitability to outspend rivals on both original and licensed content.

Launched in 2022 at $7.99 per month, Netflix’s ad-supported tier now accounts for roughly half of new sign-ups in participating markets. While Standard and Premium plans yield static per-user revenue, the advertising model offers escalating value as ad rates rise alongside viewership. In 2024 ad revenue doubled, and management projects it will more than double again in 2025, underscoring the tier’s strategic importance.

In December Netflix agreed to acquire Warner Bros. Discovery’s studio and streaming assets in a transaction valued at $82.7 billion, funded by cash and stock. This purchase would add marquee franchises—including the Harry Potter and DC universes—alongside hit series such as Game of Thrones. Regulatory scrutiny remains intense, but approval would significantly enhance Netflix’s content library and competitive moat.

Over the trailing four quarters ended September 30, Netflix reported earnings per share of $2.39, placing the current price-to-earnings ratio at 38 versus a three-year average of 44.8. Wall Street anticipates 2026 EPS of $3.23, which would lower the forward P/E to 28.1. To maintain today’s valuation multiple, shares would need a 35% gain if consensus forecasts prove accurate, highlighting potential upside for long-term investors.