Netflix Faces 41% Decline in a Year: Is the Sell-Off Approaching Its Conclusion?

Key Points

• Netflix’s stock (NASDAQ: NFLX) has decreased over 41% in the past year, with a 26% drop thus far in 2026.

• The company is currently trading at its lowest earnings multiple in four years, at just 21 times earnings, down from 63 times a year ago.

• Despite declining revenue growth, Netflix expects to generate $13 billion in Q3 revenue and an operating margin of 33%.

Netflix has faced significant stock depreciation over the past year, largely attributed to investor concerns following its failed acquisition attempt of Warner Bros. Discovery, as well as a recent downturn in revenue growth. The company reported a 13% year-over-year revenue increase in Q2 2026, down from higher growth rates in previous quarters. Analysts remain optimistic, with 68% rating the stock as a buy, anticipating a 37% potential return over the next year.

In addition to revenue declines, Netflix’s operating margins have risen to 33%, supported by an expected doubling of advertising revenue to $3 billion in 2026. The company has projected free cash flow of $12.5 billion for the year, indicating solid financial footing. Nonetheless, its recent valuation drop positions it as a focal point for investors considering market opportunities in the streaming sector.