Netflix (NFLX) is expanding its advertising platform to capture a larger share of the growing connected TV advertising market. This strategic move includes enhancements in in-house ad technology and improving campaign measurement, aiming for advertising revenues to nearly double to approximately $3 billion by 2026. The advertiser base soared more than 70% in 2025, surpassing 4,000 advertisers, with programmatic buying expected to represent over half of the non-live advertising business.
While Netflix enhances its capabilities with updates like expanded targeting and audience measurement tools, it still lags behind competitors such as Roku and Amazon, which are investing heavily in their advertising systems. The Zacks Consensus Estimate for Netflix’s revenues in the second quarter of 2026 is $12.57 billion, indicating a year-over-year growth of 13.5%.
Despite the growth in advertising, Netflix’s shares are down 21.3% year-to-date, while the broader Zacks Consumer Discretionary sector has declined by 9.5%. Valuation-wise, Netflix carries a forward price-to-sales ratio of 5.72X, exceeding the industry’s 3.98X.
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