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

Netflix released its first-quarter earnings report on April 16, and we’re here to break it all down for you. Despite the March price hikes, Netflix managed to surpass its first-quarter sales guidance. The big news? The Warner Bros. Discovery acquisition falling through seemed to have given Netflix the green light for those price increases.

Now, what does this all mean for investors? Well, we think that shares have been priced with the expectation of mid-teens annual sales growth. The 2026 outlook of 11%-13% organic growth looked promising until the surprise price increase hit in March. To keep up the growth momentum, Netflix will have to find ways to increase revenue per user, especially since the subscriber market in the US and top international countries is pretty saturated.

Our fair value estimate for Netflix stands at $80. That means we expect an average sales growth of 10% through 2030. Netflix is the only streaming business we cover with a narrow moat, which makes it a solid choice for investors at the right price.

When it comes to financials, Netflix is looking good. They ended 2025 with a strong cash position and have been steadily growing their free cash flow. Plus, Netflix has been on a share repurchase streak, buying back over $20 billion in shares since 2023. Expect to see more of that in the future.

But, like any investment, there are risks and uncertainties to consider. Competition in the streaming world is fierce, and Netflix might face challenges in growing its subscriber base or increasing revenue per subscriber as competition heats up. The transition to an ad-supported model and dabbling in live sports could also pose some uncertainties for the streaming giant.

All in all, Netflix is a solid pick for investors, but it’s essential to keep an eye on the evolving streaming landscape and how Netflix adapts to growing competition. Remember, investing always comes with risks, so do your homework and make informed decisions.