Quick Read
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Netflix (NFLX) collected a $2.80B termination fee from walking away from a Warner Bros. deal, raised free cash flow guidance to $12.5B for 2026, and doubled its advertising business target to $3B, yet shares trade at $89.65 after falling 24.76% over the past year due to Q1 EPS of $1.23 missing estimates by 8.55%.
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Netflix shares remain depressed despite strong fundamentals because analyst estimates anchor on trailing earnings rather than forward EPS of $18.03, which reflects advertising scale and 31.5% planned operating margin expansion from an increasingly profitable streaming model.
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The analyst who called NVIDIA in 2010 just named his top 10 stocks and Netflix wasn’t one of them. Get them here FREE.
Netflix (NASDAQ:NFLX) just walked away from a Warner Bros. deal with a $2.80 billion termination fee in its pocket, raised free cash flow guidance to roughly $12.5 billion for 2026, and doubled its advertising business toward $3 billion. So why are shares down 4.38% year to date and 24.76% off where they sat a year ago? Can this streamer stage a comeback to $350 by 2027?
Why Netflix Shares Are Stuck Despite Record Cash Flow
Netflix delivered Q1 revenue of $12.25 billion, up 16.2% YoY, with free cash flow surging 91.44%. Yet shares trade at $89.65, down 7.87% over the past month.
Three factors weigh on the stock. Q1 EPS of $1.23 missed the $1.345 estimate by 8.55%, even with the Warner Bros. windfall. The stock carries a beta of 1.548, so mega-cap tech weakness hits NFLX harder. The Warner Bros. walk-away removed a content acceleration catalyst some investors had priced in. The stock sits 15% below its 52-week high of $134.12.
The analyst who called NVIDIA in 2010 just named his top 10 stocks and Netflix wasn’t one of them. Get them here FREE.
Wall Street Sees 28% Upside. Our Model Says Far More
The Street’s average target sits at $114.56, supported by 8 Strong Buy, 29 Buy, 12 Hold, and 1 Strong Sell ratings. Bullish sentiment runs at 74%.
The base case prediction is $326.35 with a 90% confidence score, the bull case is $341.95, and the bear case lands at $248.70. Analysts are anchored to trailing earnings while forward EPS of $18.03 reflects operating leverage from advertising and planned 31.5% operating margin. The Street is too conservative on monetization.
The Path to $350 Per Share
Reaching $350 from today’s price of $89.65 requires a gain of 290.4%. That stretches even Netflix’s 10-year history.
With forward EPS of $18.03, a price of $350 implies a forward P/E of 19x. Our base case of $326.35 already implies 6x, meaning the bold target requires roughly 13x additional multiple expansion off depressed implied earnings.
