The fortunes of Netflix (NASDAQ:NFLX) have been volatile in 2025, making investors wonder whether the recent correction below $1,250 offers a buying opportunity. With streaming competition heating up, analysts remain divided on the future trajectory of Netflix stock. This Netflix stock forecast explores the reasons behind the decline, Wall Street expectations, and key growth drivers.
Why Has Netflix Stock Declined?
Earlier this year, Netflix gained traction as a defensive play in the tech space. While the S&P 500 Index (INDEXSP:.INX) rebounded from its April selloff, Netflix failed to keep pace. Shares have now fallen more than 10% from their June highs, landing the stock in a correction zone.
The main issue? Valuation. Netflix’s forward price-to-earnings (P/E) ratio soared into the 50s—levels even bullish investors found difficult to justify. As trade uncertainty eased, investors shifted toward cyclical names, leaving Netflix less attractive as a defensive bet.
Netflix’s Q2 Earnings Reaction
Despite beating Wall Street expectations in Q2 2025 and raising annual guidance, Netflix stock still dipped. Investors were looking for stronger catalysts after its stellar 2023–2024 performance.
Over the past year, Netflix added 41 million new subscribers, pushing its global total past 300 million. Much of this surge came from its crackdown on password sharing and the launch of a lower-cost ad-supported tier. Interestingly, Netflix has now stopped reporting subscriber counts quarterly, arguing that revenue is a more accurate gauge of success.
Yet, with expectations running high, Wall Street wanted “more,” which explains why the stock failed to rally post-earnings.
Analyst Outlook on Netflix Stock Forecast
Of the 46 analysts covering Netflix, 27 rate it a “Strong Buy,” three as a “Moderate Buy,” 15 as a “Hold,” and one as a “Strong Sell.” The average price target sits at $1,333.13—about 12% higher than current levels—with the most bullish target reaching $1,600.
Still, sentiment is mixed. J.P. Morgan, Philip Securities, and Seaport Global all downgraded the stock since May. While some target price hikes followed Q2 results, none marked a significant shift in optimism.
Growth Drivers for Netflix
Although subscriber growth may taper, Netflix’s future growth could hinge on advertising revenues. The company’s ad-supported tier is expanding quickly, and ad sales are projected to double in 2025, following similar growth last year.
To strengthen its ad business, Netflix built its own ad tech stack and struck a notable partnership with Amazon (NASDAQ:AMZN). Through this deal, advertisers using Amazon’s demand-side platform gain direct access to Netflix’s inventory across 11 markets, including the U.S., Canada, and the U.K.
Additionally, Netflix is investing heavily in live sports, new content partnerships like its collaboration with TF1 in France, and original programming—all of which can enhance its pricing power.
Is Netflix Stock a Buy at $1,250?
At a forward P/E of 46.2x, Netflix remains expensive. Among the so-called “Magnificent 7,” only Tesla (NASDAQ:TSLA) trades at a richer multiple. Yet, Netflix has unique strengths:
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A massive global subscriber base
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A growing ad business with strong momentum
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A content slate that keeps users hooked
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Strategic partnerships that extend its moat
For long-term investors, these factors could justify holding the stock. However, new buyers may want to wait for a more attractive entry point, given the limited margin of safety at current levels.
Bottom Line on Netflix Stock Forecast
The Netflix stock forecast suggests cautious optimism. While the company’s growth in advertising, content, and partnerships supports its long-term potential, the lofty valuation and tempered analyst outlook signal that investors should approach with patience.
For now, Netflix is still a leader in streaming—but whether it’s a buy below $1,250 depends on your time horizon and risk tolerance.
Featured Image: Freepik © Flowo
