NFLX

Roku's diversified ad, subscription and platform strategy, raised guidance and lower valuation premium give it an edge over Netflix now.

Ransom Canyon may be #1 on Netflix's top 10 list right now, but in the larger context of the show and the service, its performance leaves something to be desired.

Netflix's selective live events strategy is boosting subscriber sign-ups, engagement and ads, positioning live programming as a key growth driver.

I rate Netflix (NFLX) a Buy, with a fair value estimate of $92—27% upside—driven by subscription, advertising, and live programming monetization. NFLX's scale enables global content leverage, selective price increases, and margin expansion, with 2026 revenue guidance of $51.0B–$51.4B and 31.5% operating margin. Advertising and live programming offer incremental growth without major platform rebuilds; ad revenue is projected at $3B in 2026, with rapid growth potential.

Bernard Arnault says he invested in Netflix in its early days, but sold too soon. The LVMH CEO told the "Legend" podcast that he regrets missing out on the stock's subsequent surge.

Netflix is a best-in-class streaming industry leader that still has multiple avenues for future growth, and a reasonable valuation. Long-term tailwinds are structural in nature, including room for subscription price hikes and better ad monetization, and global growth in the middle class. AI could help to support engagement, ad monetization, and production. Meanwhile, Netflix has a long track record of navigating an evolving and competitive industry.

Netflix now trades at $70, but with 67% more revenue, 2.5x operating income, and much higher margins than at this price in 2021. Despite recent de-rating due to missed guidance and slower engagement, NFLX offers a historically cheap valuation—46% below its 5-year average P/E and PEG below 1. The advertising segment, now 6% of revenue and rapidly scaling, could add $5–$7 billion in high-margin revenue over three years, yet is priced at zero.

Netflix remains a buy despite recent stock weakness and a failed Warner Bros. Discovery deal. Q2 showed slowing revenue growth and margin contraction, but engagement remained resilient and full-year guidance was largely reaffirmed. The strategic pivot to live sports streaming aims to reaccelerate growth and strengthen competitive positioning.

I always spend considerable time evaluating the risk of all my investments.

Shares of Netflix Inc (NASDAQ: NFLX) were last seen up 1.7% at $71.26, extending their rebound, after a post-earnings selloff earlier this month.