Netflix’s stock (NASDAQ: NFLX) has recently experienced a decline, dropping nearly 27% since the summer of 2025, despite a 37% surge in the first half of that year. This downturn is attributed to investor concerns regarding Netflix’s pursuit of Warner Bros. Discovery assets, intensifying competition with Paramount Skydance for the acquisition amidst economic uncertainties. Currently, Netflix shares are trading at a historically low valuation, hovering around $90, which may present a buying opportunity for investors.
In the backdrop of this volatility, Netflix demonstrates strong underlying business fundamentals, with healthy revenue growth and improved gross margins. The company has effectively managed operations post-pandemic, maintaining customer retention through consistent content updates. Despite its forward price-to-earnings ratio of 27, Netflix is trading at a discount compared to less profitable peers, suggesting potential value for investors willing to navigate the current uncertainties surrounding the Warner Bros. deal.
