Is Netflix Stock a Buy, Sell, or Fairly Valued Ahead of Earnings?

Netflix is gearing up to release its third-quarter 2025 earnings report on Oct. 21, and we’re here to break down what you should keep an eye on. Morningstar has some key metrics to consider when thinking about Netflix’s future.

First off, let’s talk about sales growth. Keep an eye on whether US and Canada sales growth hits that 15% mark. Last year, we saw a big surge in subscribers after a price hike, so 15% growth gives us insight into how many new subscribers are jumping on board.

International growth is also crucial, especially in regions like APAC. If Netflix wants to keep growing, they’ll need to focus on expanding internationally in 2026 since the US market is pretty saturated.

Next up, take a look at profit margins. Last quarter, Netflix hinted at lower margins, so keep an eye out for any changes there. With the current stock valuation, they’ll need to up those margins to stay competitive.

Speaking of stock valuation, Morningstar gives Netflix a fair value estimate of $750 per share, which is lower than its current price. They even think Netflix is overvalued, despite being a leader in the industry.

In terms of financials, Netflix seems to be in good shape. Their debt is manageable, and they’re expected to have solid free cash flow in 2025. They’re not big on dividends, but they do have a share repurchase program in place.

That said, the future is uncertain for Netflix. The streaming landscape is changing, and Netflix is facing more competition than ever before. With new players entering the market, Netflix might have a tougher time growing its subscriber base or maintaining high revenues per subscriber.

Overall, Netflix has a solid foundation, but the road ahead might be a bit rocky. Keep an eye on those earnings reports to see where Netflix is headed next.