Growth investor Cathie Wood was surprisingly quiet last week, as the market raced to new highs. She lightened her stake on a pair of positions across her Ark Invest ETFs on Monday. She didn't make any trades on Tuesday or Wednesday. She pared back on a single holding on Thursday. It wasn't until Friday that Wood actually bought something, and Netflix(NASDAQ: NFLX) was one of just two existing positions that she added to on the final trading day of last week.
With Netflix shares plummeting nearly 10% on an otherwise buoyant trading day, Friday's price action stands out. Many aggressive growth investors prefer to buy stocks on the way up, but Wood doesn't usually behave like a momentum investor. Ark Invest often adds to positions on down days, even though the other stock she bought on Friday was a biotech soaring nearly 30% by the closing bell.
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Is Wood's contrarian stance on Netflix the right call? Let's take a look at some of the reasons why she could be wrong. I'll follow up with some reasons why investing in Netflix might be a smart thing to do.
Image source: Getty Images.
Knock on Wood
On the surface, Thursday afternoon's fourth-quarter results were a blowout. The 16% increase in revenue through the first three months of this year was just ahead of the 15% that Netflix was targeting. Earnings soared 83% to $5.3 billion -- or $1.23 a share -- landing well ahead of what analysts and Netflix itself were modeling.
The numbers may look decent, but this wasn't a good report. It wasn't even a ho-hum report. Revenue rose just 14% on a foreign-exchange neutral basis. Was it really a top-line beat or just the lucky break of being on the right side of a weakening U.S. dollar over the past year?
The bottom-line beat is even more worthy of an asterisk. When Netflix initiated its first-quarter guidance in January, it didn't expect to be on the receiving end of a $2.8 billion payment from Warner Bros. Discovery(NASDAQ: WBD) as a buyout termination fee. The windfall after taxes inflated the quarterly performance.
Two other dings in the report were more obvious. Guidance was disappointing. Netflix didn't boost its full-year outlook, despite exceeding its first-quarter forecast and raising monthly subscription prices for U.S. users last month. The second-quarter guidance it initiated was another buzzkill, as the 13.5% year-over-year increase in revenue would be its weakest top-line gain over the past year. Its bottom-line outlook was short of Wall Street's profit target. With domestic prices rising in late March, the sting is particularly harsh.
Another setback in the report was news that founder and chairman Reed Hastings won't run for board reelection at June's annual shareholder meeting. The former CEO generated generational wealth for early investors in the company. Naturally, he was no longer involved in day-to-day operations, but his departure still stings.
Buying the dip
One could argue that the stock's dip was foreshadowed by the titles of some of its hottest shows. Big Mistakes, Trust Me: The False Prophet, and Something Very Bad is Going to Happen are among its most-streamed shows in April.
Seriously, though, Cathie Wood adding to Ark Invest's Netflix position could be a winning decision. Netflix stock is essentially where it was a year ago. In that time, revenue has accelerated to its strongest trailing growth in four years. It dodged a bullet -- and got paid handsomely -- for walking away from overpaying for Warner Bros. Discovery.
The stock isn't textbook cheap. Netflix is trading for 25 times next year's earnings. However, the platform has proven its all-weather resiliency. Revenue has risen at least 6% in each of its first two dozen years as a public company, with double-digit percentage jumps in 22 of those 24 years. The streak may end this year, but revenue has accelerated in each of the last three years.
Netflix has positioned itself well to make the most of its viewers' flinching at its almost-annual price hikes. Its cheaper ad-supported tiers are booming in popularity, and Netflix expects ad revenue to double in 2026. With consumer concerns about geopolitical upheavals and rising gas prices, staying at home and watching a show on the world's most popular streaming service sounds like a pretty good value proposition.
Should you buy stock in Netflix right now?
Before you buy stock in Netflix, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Netflix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
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Rick Munarriz has positions in Netflix. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
In 2026, Netflix (NFLX) has once again attracted the attention ARK Invest’s Cathie Wood, who accumulated shares during post-earnings volatility that has left the stock well below recent highs.
Her history with Netflix illustrates conviction, patience, and willingness to adapt when a thesis changes.
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Netflix (NASDAQ: NFLX) has attracted ARK Invest's attention in 2026, with the fund accumulating shares during volatility that has left the stock well below recent highs. As of April 17, 2026, Netflix closed at $97.31, down 9.7% on the day following a mixed earnings report. For Cathie Wood, the dip looks familiar.
The 2026 Thesis: Buying the Dip
Netflix's Q1 2026 revenue came in at $12.25 billion, beating consensus estimates, but per-share earnings of $1.23 fell short of the $1.34 consensus estimate. The post-earnings drop brought it below its 200-day moving average of $105.88, a level that has historically attracted growth-oriented buyers. ARK's re-entry fits that pattern. The company reaffirmed full-year 2026 revenue guidance of $50.7 billion to $51.7 billion and raised free cash flow guidance to approximately $12.5 billion. The advertising business is accelerating: over 60% of new sign-ups in ads markets chose the ad-supported tier, and advertiser count grew 70% year-over-year to over 4,000 clients.
Era One: The True Believer (2017–2020)
Netflix aligned naturally with ARK's disruptive innovation framework. The cord-cutting thesis, global content dominance, and linear TV's collapse matched Wood's worldview. Netflix shares have risen about 819% over the past decade, with significant gains occurring while ARK held the stock as a core position. The 2020 streaming boom validated the thesis, and Netflix became a flagship name in both ARKK and ARKW.
ARK trimmed Netflix aggressively in 2021, with reported single-day sells of $8 million and $39 million in August 2021. The timing proved prescient: Netflix's 2022 collapse, triggered by subscriber growth stalling, was severe. Over the five-year period ending April 17, 2026, the stock gained 78.05% from a split-adjusted $54.65, obscuring the depth of the 2022 drawdown before recovery. ARK's exit reduced exposure before the worst crash, illustrating the difficulty of timing high-multiple growth stocks.
Era Three: The Return (2025–2026)
What brought Wood back? The business has changed materially. Netflix shifted from subscriber counts to revenue per user, advertising, and live events. Advertising revenue is on track to reach approximately $3 billion in 2026, doubling year-over-year. Live programming, including the Canelo vs. Crawford fight drawing over 41 million viewers, signals a new content layer. The stock's trailing P/E of 31x remains elevated but sits below the 2020 multiples Wood was willing to pay.
What Investors Should Take Away
Wood's Netflix history shows that even high-conviction investors revisit names after thesis resets. Analysts at Morgan Stanley, JPMorgan, and Bank of America have all maintained Buy-equivalent ratings following the April earnings drop, with a consensus price target of $114.46. Retail investors should not mechanically follow ARK's moves. Wood's fund structure and time horizon differ from most individuals. Her Netflix arc illustrates conviction, patience, and willingness to adapt when a story changes.
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Netflix(NASDAQ: NFLX) delivered a strong first quarter, but the market was not happy about it. There seemed to be a disconnect between the numbers the streaming service presented and how investors ultimately feel about the forward guidance.
This led to the stock price plunging 10% on Friday, April 17. Long-term investors should see this sudden dip as a solid entry point into a company that's steadily expanding globally, rather than a warning sign of future weakness.
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Investors who were upset with the lukewarm forward outlook are missing a bigger point. Netflix has a massive opportunity outside of the United States. The streamer has penetrated less than 45% of the total addressable market, leaving plenty of eyeballs to capture through subscriptions.
Image source: Getty Images.
Netflix's fundamentals are fully intact, and the Q1 2026 results are overwhelmingly positive. First-quarter revenue grew 16% year over year, and operating income was up 18%. Both of these results were slightly ahead of the company's guidance.
Netflix also saw a massive jump in free cash flow following the termination of the Warner Bros. Discovery deal, as Netflix was owed $2.8 billion if the deal didn't finalize successfully.
Netflix's stock has been relatively flat over the past 12 months. The company still trades at a slight premium with a forward P/E ratio of 34 and a PEG ratio of 2.25. Overall, Netflix is really well positioned to continue its organic growth worldwide.
Should you buy stock in Netflix right now?
Before you buy stock in Netflix, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Netflix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $524,786!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,236,406!*
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Catie Hogan has positions in Warner Bros. Discovery. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
Netflix(NASDAQ: NFLX) released its first quarterly report since the drama surrounding the acquisition of Warner Bros. Discovery ended with Netflix declining to raise its bid and receiving a $2.8 billion payout instead.
Shares tanked even after a solid quarter, as investors were hoping for better forward guidance. One Wall Street analyst thinks today's move is a great buying opportunity for investors.
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The Warner Bros. competition was a distraction for investors. The stock plunged from about $120 to $75 per share as that process was playing out. It recovered much of that before last night's earnings announcement. After a strong earnings report, investors wanted to see the company boost guidance for this year. Today's stock reaction came because management failed to do so.
Netflix also trades at a high multiple. Even after today's drop, it is valued at a forward price-to-earnings ratio of about 31. But that is well below the three-year average of 37. Of course, that type of multiple means investors expect continued strong growth.
Revenue grew 16% in Q1, and the company will need to maintain or even raise that level moving forward. Seaport Research Partners analyst David Joyce thinks today's drop is a buying opportunity as growth continues even without Warner Bros. He raised his price target from $115 to $119 per share after the report, according to Barron's.
Just as the acquisition drama gave investors a good chance to buy Netflix stock, today's move could offer a similar opportunity if the business continues to fire on all cylinders.
Should you buy stock in Netflix right now?
Before you buy stock in Netflix, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Netflix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $581,304!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,215,992!*
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Howard Smith has positions in Netflix. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
Netflix only repurchased $1.3 billion of its stock in the first quarter, a slower pace than the $2.3 billion quarterly average in 2025. With Netflix shares falling 1% in the first quarter due to lingering concerns about the price tag for Warner Bros. Discovery (WBD) — a deal Netflix has since dropped — the lack of more aggressive buying of the stock could be viewed as a red flag by investors.
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What's more, executives told Wall Street on its earnings call that there are no changes to its capital allocation program, despite their positivity around new podcasts, vertical videos, and live events.
About $6.8 billion remains for repurchase under Netflix's authorization.
So if Netflix intends to be an aggressive buyer of its stock as a show of confidence in its future fundamentals this quarter and into year-end, it will likely come as a surprise to the Street.
"Recall, after large scale M&A was called off, investors suspected Netflix may increase its share repurchases and raise its fiscal year 2026 margin outlook, which incorporated 50 basis points of M&A expenses," Citi analyst Jason Bazinet wrote in a note. "In addition, some investors suspected the US price hike was previously not incorporated in the guidance. However, management suggested no change to their capital allocation strategy, maintained the FY26 outlook, and provided worse-than expected 2Q26 guidance. As such, we’d expect shares to trade lower (especially given the recent run in the equity)."
Netflix shares tanked 10% in premarket trading on Friday.
Fans are seen at the Bullpen Fan Activation during the MLB Opening Night Game on March 25, 2026, in San Francisco, Calif. (Thos Robinson/Getty Images for Netflix) ·Thos Robinson via Getty Images
Netflix's earnings day came up short elsewhere too.
Investors were frustrated that Netflix failed to raise its full-year 2026 revenue guidance from $50.7 billion to $51.7 billion.
The company’s full-year operating margin guidance of 31.5% came in below the 32% analysts had modeled, suggesting that the "breakup fee" gains are masking higher content amortization costs.
And adding to the uncertainty, longtime chairman Reed Hastings announced he is officially stepping down, marking the end of an era just as the company faces increasing pressure to prove its advertising business can truly scale.
"Our overall view is that Netflix is properly valued at current levels and we believe increasingly growth is likely to be driven by price increases (and advertising gains off a relatively low base) rather than subscriber growth," Pivotal Research Group analyst Jeff Wlodarczak wrote in a note, adding, "We view the story as lacking excitement relative to a rich valuation."
Wlodarczak reiterated a Hold rating on Netflix shares.
Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
Cathie Wood, head of Ark Investment Management, was relatively quiet this week, even as the S&P 500 rallied about 4.5% over the past five days.
Wood made no trades on Tuesday, April 14, and Wednesday, April 15, and sold some shares of two medical stocks on Monday, April 13, and Thursday, April 16. But on Friday, April 17, she made a bigger move, adding shares of a megacap tech company that had dropped nearly 10% in a single day, in line with her usual dip-buying approach.
In 2025, the flagship Ark Innovation ETF gained 35.49%, far outpacing the S&P 500’s return of 17.88% in the same period. So far this year, Wood’s flagship Ark Innovation ETF (ARKK) is up 1.75% year to date, while the S&P 500 surged 4.1%.
Wood gained a reputation after the Ark Innovation ETF delivered a 153% return in 2020. But her style also brings painful losses in bearish markets, as seen in 2022, when the Ark Innovation ETF tumbled more than 60%.
Those swings have weighed on Wood’s long-term gains. As of April 17, the Ark Innovation ETF has delivered a five-year annualized return of -8.47%, while the S&P 500 has an annualized return of 12.86% over the same period, according to data from Morningstar.
Cathie Wood expects “great acceleration” brought by tech developments
Wood focuses on high-tech companies across artificial intelligence, blockchain, biomedical technology, and robotics. She thinks these businesses have strong growth potential, though their volatility often causes fluctuations in the Ark’s funds.
From 2014 to 2024, the Ark Innovation ETF wiped out $7 billion in investor wealth, according to a March 2025 analysis by Morningstar’s analyst Amy Arnott. That made it the third-biggest wealth destroyer among mutual funds and ETFs in Arnott’s ranking. The analyst hasn’t updated the 2025 ranking.
In a March 23 Bloomberg podcast, Wood says the global economy is not heading into a downturn, but into what she calls a “great acceleration” driven by AI and other breakthrough technologies.
“We’re not going into the Great Depression; we’re going into the great acceleration,” Wood said, pointing to how past technological revolutions reshaped economic growth.
She noted that global real GDP growth averaged just 0.6% between 1500 and 1900, before the Industrial Revolution lifted it to about 3% for more than a century. Now, she argues, a new wave of innovation could push growth much higher.
“We think [technologies] are going to take growth into the 7 to 8% range,” Wood said, adding that the number may actually be conservative.
Wood also noted that AI is driving down costs across industries.
“These technologies are deflationary,” she said. “AI training costs are dropping 75% per year, and inference costs are falling as much as 85% to even 98% annually.”
In a letter published in January, Wood rejects the “AI bubble” talk, saying that it "is years away" and that "the most powerful capital spending cycle in history" is coming.
"What once was the cap in spending seems to have become a floor now that the AI, robotics, energy storage, blockchain technology, and multiomics sequencing platforms are ready for prime time," she said.
But not all investors agree with Wood’s optimism. In the 12 months through April 16, the Ark Innovation ETF saw roughly $1.3 billion in net outflows, according to data from ETF research firm VettaFi.
In the 12 months through April 16, the Ark Innovation ETF saw roughly $1.3 billion in net outflows.Getty Images
Cathie Wood buys $2.5 million of Netflix stock
On April 17, Wood’s Ark Next Generation Internet ETF bought 26,161 shares of Netflix Inc. (NFLX), according to Ark’s daily trade information. These shares are valued at roughly $2.5 million as of the latest closing price of $97.31.
Shares of Netflix dropped nearly 10% on April 17 after its first-quarter earnings, the first report since it scrapped a proposed acquisition of Warner Bros. Discovery in February.
The streaming giant reported $12.25 billion in revenue, above the $12.18 billion analysts expected and up 16% from $10.54 billion a year earlier. The company's earnings per share were $1.23, nearly double the 66 cents it posted a year earlier.
Netflix cited stronger-than-expected operating income (which grew 18%) and a $2.8 billion termination fee tied to its scrapped deal with Warner Bros. Discovery.
Netflix didn't raise its 2026 outlook, maintaining its previous full-year guidance of revenue between $50.7 billion and $51.7 billion.
The failed deal with Warner Bros. Discovery will still affect Netflix’s finances this year. Netflix Chief Financial Officer Spencer Neumann said that while some of the initially planned costs will not “fully materialize,” some expenses that had been expected in 2027 will now be pulled forward into 2026, CNBC reported.
In March, Netflix revealed it would again raise prices across all of its streaming plans. The last time it raised prices was January 2025.
Company management defended the price hike during their latest earnings call.
"We look to provide more and more value to our members, [and] invest the revenue that we've got successfully," said Co-CEO Greg Peters. "Occasionally, when we've added more value, we ask our members to contribute more so that we can invest that into delivering them even more entertainment value."
JPMorgan recommended that investors buy Netflix shares on the sell-off, The Fly reported.
The firm reiterated an overweight rating on Netflix with a $118 price target following the earnings report. It believes Netflix "continues to execute well, with considerable growth headroom," the analysts wrote.
Netflix is not a top 10 holding in either the Ark Next Generation Internet ETF or the Ark Innovation ETF.
Top 10 holdings of the Ark Innovation ETF as of April 17, 2026:
Wood had fully exited her Netflix holdings in Q3 2022. She then re-initiated the stake in Q4 2025, adding approximately 166,000 shares during the quarter, according to Stockcircle data.
In January, Wood bought 83,368 shares valued at more than $7 million after the company posted a strong quarter of beats across both lines, TheStreet previously reported.
On the sell side, Wood sold 11,465 shares of Circle Internet Group (CRCL), 31,417 shares of Bullish (BLSH), and 21,671 shares of CoreWeave (CRWV) on April 17.
Netflix (NFLX) posted Q1 revenue of $12.25B, beating Wall Street estimates by $70M, with adjusted EPS of $1.23 and operating income jumping 18% despite second-quarter guidance missing expectations; the company raised U.S. prices across all tiers in March (ad tier to $8.99, standard to $19.99, premium to $26.99) and projects ad revenue to roughly double in 2026. Warner Bros. Discovery (WBD) merger collapsed in late February, freeing Netflix from $83B in acquisition debt and leaving the company with a $2.8B breakup fee that bolstered first-quarter earnings.
Netflix’s stock sell-off on modest Q1 guidance and co-founder Reed Hastings’ planned board exit in June overreacts to typical quarterly variability, as the company demonstrated pricing power and avoided integration distraction from the failed Warner Bros. deal.
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Streaming has become a household necessity, with families carving out budgets even as economic headlines stay mixed. Major players reported this week, and while Disney (NYSE:DIS) wrestled with parks softness and studio costs, Netflix (NASDAQ:NFLX) delivered numbers that once again proved its model works.
The streaming company posted first-quarter revenue of $12.25 billion after the market's close yesterday, topping Wall Street expectations of $12.18 billion and rising 16.2% from $10.54 billion a year earlier. Adjusted earnings reached $1.23 per share, handily beating prior guidance. Yet shares are dropping more than 10% in premarket trading today, as second-quarter guidance missed estimates and co-founder Reed Hastings announced he would leave the board in June.
Smart investors should see the sell-off as an overreaction.
Earnings Beat Expectations, but Wall Street Focused Elsewhere
Let’s start with what actually happened. Netflix revenue climbed for the January-to-March period while operating income jumped 18%. A $2.8 billion breakup fee tied to the collapsed Warner Bros. Discovery (NASDAQ:WBD) deal helped EPS, yet even without it, the core business held up. Subscriber trends stayed healthy, and ad revenue continued its ramp higher.
These results arrived just months after Netflix walked away from a potential $83 billion acquisition of Warner Bros. that caused investor consternation over massive debt and the culture clash between a lean streamer and a traditional movie studio. Netflix shares plunged roughly 30% at the height of those talks.
Once the deal fell through in late February, the stock reversed sharply, rising 44% from its lows. This quarter, though, was supposed to showcase the company’s standalone growth path, but the modest guidance miss overshadowed the beat.
Risks Were Already Priced In
Netflix guided second-quarter revenue at $12.57 billion, below the $12.64 billion consensus. EPS guidance came in at $0.78 versus $0.84 expected, and operating income at $4.11 billion against the $4.34 billion forecast. The full-year outlook stayed unchanged at $50.7 billion to $51.7 billion in revenue, or 12% to 14% growth.
That said, the market reacted as if the sky had fallen. Add in Reed Hastings’ planned board exit, and doubts multiplied. Yet the departure comes after he stepped back as co-CEO in 2023, and the company has run smoothly under current leadership. The Warner Bros. episode had already tested investor nerves; walking away freed Netflix from integration headaches and left it with a $2.8 billion cash infusion instead. Shares have soared precisely because management avoided that distraction.
The guidance miss, while real, reflects nothing more than typical quarterly variability in a business built on content timing and pricing. Netflix still projects healthy growth for 2026, and the stock now trades at a forward P/E around 31 times -- higher than Disney’s 14.5 times but backed by faster revenue expansion and pure-play streaming margins.
Price Hikes Signal Confidence in the Roadmap
Here is the detail that matters most. In March, Netflix raised U.S. prices across every tier: the ad-supported plan was increased by $1 to $8.99 per month, the standard plan by $2 to $19.99, and the premium plan by $2 to $26.99. That move locks in higher revenue per user without relying on massive subscriber additions. Management could have waited; instead, it acted early, betting that members value the service enough to pay more.
Ad revenue is on track to roughly double in 2026, and engagement remains solid. Compare that to peers: Disney bundles multiple services and still posts slower top-line growth in its direct-to-consumer segment. Netflix’s focused approach -- content, pricing, ads -- delivers clearer leverage. Granted, higher prices can test churn in a competitive market, but the company has executed multiple rounds of increases before with minimal fallout.
Key Takeaway
When all is said and done, the tumble on guidance hands long-term investors a better entry point. Netflix beat on the metrics that count -- revenue, earnings, and pricing power -- while sidestepping a debt-heavy merger that would have changed its culture. The business generates strong free cash flow, grows faster than most entertainment peers, and now operates without the Warner Bros. overhang.
Shares may stay volatile in the near term, but the data shows a company executing its plan. For retail investors seeking exposure to streaming’s winner, this dip is your signal to buy.
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Netflix(NASDAQ: NFLX) operates the world's largest streaming platform for movies and television shows. Its stock peaked at around $132 last June, before embarking on a steady decline, which then accelerated when the company announced plans to acquire Warner Bros. Discovery for a whopping $82.7 billion.
Netflix stock was down by as much as 42% from its peak recently, as investors were worried about the deal's hefty price tag. However, it won't be going ahead because Warner decided to go with an offer from Paramount Skydance instead. Investors seemed pleased by this, and Netflix stock is finally on the road to recovery.
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On April 16, Netflix will release its operating results for the first quarter of 2026 (ended March 31). Management's guidance points to strong revenue and earnings growth, so should investors buy the stock ahead of the upcoming report, especially while it's still down from its peak?
Image source: The Motley Fool.
Staying one step ahead of the competition
Netflix had over 325 million paying subscribers at the end of 2025. It's towering over its main rivals like Warner Bros. Discovery's HBO Max and Disney's Disney+, which have around 131 million subscribers each. Netflix continues to cement its dominance by outspending its streaming competitors when it comes to creating and licensing content, which consistently attracts new members.
However, the company also generates growth by catering to people of all economic circumstances with several membership options. It launched a subscription tier in 2022 that shows advertisements to its members in exchange for a heavily discounted price. At just $8.99 per month, it's much cheaper than Netflix's Standard ($19.99 per month) and Premium ($26.99 per month) tiers.
While the ad-supported tier nets less money upfront, each member becomes more valuable over time because Netflix can charge businesses more money for advertising slots as this subscriber base grows. Plus, the company is investing heavily in live content, which typically attracts premium ad prices. This includes weekly World Wrestling Entertainment (WWE) programming, blockbuster live boxing matches, multiple Major League Baseball (MLB) live events per year, and even live National Football League (NFL) matches.
Netflix exclusively showed both Christmas Day NFL games in 2024 and 2025, and it will do so again in 2026. But the company is also reportedly trying to win the rights to show two more games in the upcoming season, which will potentially attract both new members and new advertisers.
Netflix likely had a strong first quarter
Netflix generated a record $45.2 billion in revenue during 2025, which was up 15.8% compared to the previous year. While advertising revenue only accounted for $1.5 billion of that figure, it grew by more than 150%, and the company expects it to more than double again during 2026.
The first quarter is often Netflix's weakest period of the year. The company tends to schedule some of its hardest-hitting content during the holiday season when viewers are most engaged, and many members who sign up over this period wind up cancelling their subscriptions early in the new year.
However, management's guidance suggests Netflix generated a record $12.2 billion in first-quarter revenue, representing 15.3% year-over-year growth. That would mark an acceleration from the 12.5% growth the company generated in the first quarter of 2025, highlighting the momentum in the business right now.
At the bottom line, management's guidance points to earnings of $0.76 per share, which would also be the best quarterly result in the company's history. Earnings drive a company's stock price (which I'll explore further in a moment), but record profits also give Netflix the flexibility to continue outspending its competitors to remain the industry's dominant provider.
Should you buy Netflix stock before April 16?
A single quarter is unlikely to change the strong long-term trajectory of Netflix's business, so investors shouldn't place too much weight on the April 16 report. However, its stock is sitting at an attractive valuation following its recent sell-off, so it might be a compelling buy today regardless of the upcoming earnings release.
Based on Netflix's 2025 earnings of $2.53 per share, its stock is trading at a price-to-earnings (P/E) ratio of 40.3, which is below its five-year average of 42.5. But it gets better -- Wall Street expects the company's earnings to grow to $3.17 per share in 2026, followed by $3.84 per share in 2027 (according to Yahoo! Finance), placing its stock at forward P/E ratios of 32.5 and 26.4, respectively.
That means Netflix stock would have to soar by 52% by the end of next year just to maintain its current P/E ratio of 40.3. That is a solid potential return for investors, which might be enough reason to consider buying the stock today, irrespective of what might happen on April 16.
Should you buy stock in Netflix right now?
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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix, Walt Disney, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
