Netflix Stock Is Down 32%. Here's Why It's a Screaming Buy.
Key Points
Netflix is expanding into live events, video podcasts, and gaming to further engage subscribers.
Although the streaming giant's stock is well off 52-week highs, the company's balance sheet is very strong.
The company has more than 325 million subscribers.
Trading at $91 per share, Netflix (NASDAQ: NFLX) is well off its 52-week high of $134 as of this writing on April 27. The dip in its price presents an opportunity for investors who can see Netflix for what it really is: a company that's positioned to dominate the streaming world.
Yes, Netflix is ubiquitous in the United States, but there's a more compelling story outside of the U.S. Netflix has a largely untapped addressable market. It's also a business that's rapidly expanding beyond streaming, with surging free cash flow that's only strengthening the company's ability to grow.
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Shockingly, not everyone in the world has Netflix
Netflix currently reaches only 45% of its total addressable market. This realization is a huge win for investors because it means that Netflix, even though it's already quite large, still has plenty of room to grow. The streaming giant is available in more than 190 countries and is focusing on creating localized content to engage people in their own languages and cultures.
The company is becoming an entertainment ecosystem. Far beyond just streaming movies, Netflix is also expanding into gaming, video podcasts, and live entertainment. Its advertising tier is growing quickly as well. This effort aims to deepen subscriber engagement and build a competitive moat that won't be easy to replicate or tear down.
Image source: Getty Images.
Netflix has a powerful balance sheet right now. The company's stockholders' equity grew from $26.6 billion at the end of 2025 to $31.1 billion at the end of March 2026. Its free cash flow also exploded to $5.2 billion in the first quarter of 2026.
Even Netflix has critics
Not everyone believes in Netflix's growth strategy, however. Some analysts were disappointed after Netflix missed out on acquiring Warner Bros. Discovery amid a contentious bidding war with Paramount Skydance. Critics also believe that the departure of co-founder and board chairperson Reed Hastings in June is a negative sign for the company.
This is all short-sighted, in my opinion. Yes, an acquisition of that size could've potentially supercharged Netflix's growth mission, but at a substantial cost. Hastings is also leaving to pursue philanthropic endeavors and other passions. Current CEO Ted Sarandos said that Hastings' departure had nothing to do with the failed Warner Bros. bid.
Netflix has proven time and again that it can grow organically and sustainably. It has matured into a fully fledged media company with a solid strategic plan to expand worldwide through localized content and multiple verticals. This latest pullback in stock price should be a welcome opportunity and entry point for long-term investors.
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.