Netflix Stock Falls to 28 Times Trailing Earnings
Netflix stock now trades at 28 times trailing earnings, less than half its 10-year average of 60 times trailing earnings. The multiple has compressed even as the business keeps expanding, which is why the name is being read less like a pure growth story and more like a mix of growth and value.
LyLe Daly Sees Two Traits
Lyle Daly, a writer at The Motley Fool, argued that Netflix has characteristics of both growth stocks and value stocks. That split shows up in the numbers: the company was treated as a classic growth stock for much of the 2010s, but the current price-to-earnings setup looks far closer to what investors usually pay for mature cash generators.
More than 325 million subscribers at the end of 2025 gave Netflix a scale advantage that few streaming rivals can match. Amazon was estimated to have about 200 million users and was said to be in second place among streaming services, leaving Netflix with the larger base even as the competitive field keeps changing.
$12.3 Billion Revenue in Q1 2026
$12.3 billion in first-quarter 2026 revenue, up 16% year over year, showed the company was still growing at a solid clip. Management also expected full-year revenue of $50.7 billion to $51.7 billion, a range that implied 12% to 14% growth, so the business is not behaving like a slow-moving legacy media asset.
$1.5 billion in ad revenue during 2025 and a 3-point increase in operating margin to 29.5% pointed to a more efficient model. Netflix has been shifting away from heavy content spending and leaning harder on international growth, where it often charges lower monthly rates than in the U.S., yet the margin still moved higher. The company is targeting a 31.5% operating margin for 2026.
Free Cash Flow Still Rising
$11.9 billion in free cash flow over the trailing 12 months at the end of Q1 2026 gave the stock another support line beneath the earnings multiple. That cash generation matters because it means Netflix can keep funding growth while still looking more like a business that throws off money, not just one that spends it.
28 times trailing earnings is also below the 22 times trailing earnings seen in the Russell 1000 Value index to start 2026? No—Netflix still traded above that benchmark, but the gap had narrowed sharply from its 60 times trailing earnings average. For readers, the practical takeaway is simple: Netflix no longer carries the old growth-stock premium it once did, so the market is paying more for durability and less for hope.
