Netflix, Inc. (NASDAQ: NFLX) is trading near $94 per share in mid-December 2025 after a dramatic year of growth, strategic shifts, and market repricing. As of the latest market data, shares range around $93–$95 — down from their 2025 highs above $130 and adjusted lower following a 10-for-1 stock split approved in late 2025.
This article looks beyond short-term price action to evaluate whether Netflix is currently overvalued or undervalued, with a focus on long-term fundamentals, strategic initiatives, and upcoming catalysts.
Current Price & Valuation: Where NFLX Stands Today
- Current Share Price: ~$94 (post-stock split).
- Market Cap: Roughly $420B–$430B.
- P/E Ratio: ~40–47x forward earnings — a premium compared with broader market tech multiples but consistent with high-growth media peers.
- Analyst Consensus: Generally Moderate Buy/Buy with average 12-month targets well above current price (often near $130–$140).
Netflix’s valuation remains elevated by traditional measures (P/E, P/S) relative to average S&P 500 levels, but it is significantly cheaper today than earlier in 2025 and trades well below its 52-week high.
This setup begs the question: does the market have good reason to price Netflix where it is — or is the stock undervalued relative to growth prospects and strategic shifts like the Warner Bros. acquisition?
Growth Drivers Supporting a Bullish View
1. Sustained Revenue & Subscriber Momentum
Netflix projects ~15–17% revenue growth in 2025, expecting total sales near $45B.
Advertising revenue — initially a secondary stream — continues to double and expand margins, diversifying Netflix’s model beyond pure subscription fees.
2. Diversification Beyond Streaming
NFLX is moving aggressively into live events, sports, and HBO-level studio content via its proposed acquisition of Warner Bros. Discovery — a transformational strategy that could boost long-term engagement and pricing power.
3. Strategic Stock Split & Buybacks
Netflix completed a 10-for-1 stock split in late 2025, lowering the per-share price to boost liquidity and retail participation.
They also authorized a $15 billion buyback, signalling confidence from management and supporting cash returns to shareholders.
4. Content Scale and Competitive Position
NFLX remains one of the globally dominant content platforms with one of the industry’s lowest churn rates and highest engagement — a durable competitive advantage.
Risks and Bearish Forces Investors Must Weigh
1. Growth Moderation After Initial Tailwinds
Some analysts note that gains from password-sharing crackdowns and ad tiers may moderate over time as those strategies age.
2. Competitive Pressure & Tech Rotation
Streaming competition from Disney+, Amazon Prime, and evolving free and ad-supported rivals could compress margins and subscriber growth long term. Macro shifts also pressure tech valuations in general.
3. Warner Bros. Acquisition Uncertainty
While the Warner Bros. deal represents a huge content transformation, it brings regulatory risk and integration challenges. Antitrust scrutiny and financing complexities could delay or dilute expected value.
4. Valuation Complexity
Some independent fair-value models argue Netflix could be 25–40% overvalued at current expectations if growth decelerates faster than forecast.
Analyst Targets & Diverging Views
Analyst price forecasts vary widely:
- Consensus 12-month target often sits above current levels, suggesting 20–40% upside.
- Price targets range from $77 to $160+, reflecting differing assumptions about growth, profitability, and margin stability.
This breadth illustrates that valuation is highly sensitive to growth assumptions and competitive dynamics.
Is NFLX Overvalued or Undervalued?
Valuation Case for Undervalued:
- Strong growth in revenue and ad monetization.
- Strategic expansion into live events and potential new blockbuster content pipelines.
- Buybacks and stock split improving shareholder value mechanics.
Valuation Case for Overvalued:
- Premium multiples requiring continued double-digit growth.
- Slowing subscriber addition beyond early post-pandemic benefits.
- Execution risk on acquisitions could sap value.
Today’s price reflects a market pricing in slower growth while underweighting Netflix’s content scale and strategic acquisitions.
Final Recommendation: Buy on Dips, Target Growth Exposure
Rating: BUY (Long Term)
Rationale: For long-term investors (3–5+ years), Netflix represents a compelling blend of high-quality content moat, diversified revenue streams, and global scale. The current price — significantly below 2025 highs — provides a psychologically and technically attractive entry point for accumulation.
Target Range:
- 12-month price target: $125–$145 (depending on deal resolution and growth execution).
- Risk range: $85–$78 if execution falters or growth disappoints.
Investment Strategy:
- Accumulate on pullbacks near multi-month lows (~$90 range).
- Use partial position strategies to balance exposure if volatility increases near acquisition outcomes.
- Monitor subscriber growth, ad revenue trajectory, and regulatory developments on Warner Bros. deal.
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