Netflix (NASDAQ:NFLX) was one of the strongest performers in early 2025, but its recent underperformance has left many investors wondering: what’s next? The Netflix stock forecast remains a hot topic as the streaming giant struggles to maintain momentum despite strong financials. Over the last three months, NFLX has risen just 1.7%, lagging behind the S&P 500 Index (INDEXSP:.INX), which gained 12.4% over the same period.
Now trading 14% below its 2025 highs, Netflix has entered correction territory. But with robust fundamentals and strategic growth drivers, is this weakness an opportunity in disguise?
Why Netflix Stock Underperformed
To understand the Netflix stock forecast, it’s important to analyze the reasons behind its recent stagnation. NFLX’s early 2025 rally was supported by macroeconomic uncertainty that favored defensive plays like streaming. But as trade tensions eased and investors rotated toward cyclical stocks, Netflix lost its short-term shine.
Valuation was also a concern. Netflix’s forward price-to-earnings (P/E) ratio had climbed into the 50s—territory even some bulls found difficult to justify. The current forward P/E is more reasonable at 44.9x, while the price-to-growth ratio sits at 1.97x. While these metrics are not exactly cheap, they make the risk-reward outlook more balanced going forward.
Key Growth Catalysts for Netflix
Despite a recent price dip, the Netflix stock forecast remains largely positive in the medium to long term due to several factors:
1. Advertising Revenue Potential
Netflix is well-positioned to scale its ad-supported tier, tapping into a growing, engaged audience. Though the company hasn’t disclosed exact figures, it expects ad revenues to double in 2025. With its proprietary ad tech stack in place, Netflix can offer a premium experience for advertisers, opening a new revenue stream that enhances monetization.
2. Subscription Growth and Pricing Power
While Netflix may not replicate past subscription growth, it continues to add users steadily. With a strong content slate and added features like live sports and international partnerships (e.g., with TF1 in France), the company is solidifying its position in consumers’ entertainment routines. This strategic positioning should allow Netflix to gradually raise subscription prices and explore new tiered offerings.
What Do Analysts Say About Netflix?
Analyst sentiment toward Netflix has been mixed in recent months. Following Q2 earnings, some firms issued modest price target increases, but others opted for caution. Philip Securities and Seaport Global recently downgraded NFLX to “Sell” and “Hold,” respectively, citing high valuations and limited short-term upside.
Even JPMorgan (NYSE:JPM), previously bullish, cut its rating earlier this year. Still, the average analyst target price sits at $1,316.51, implying nearly 15% upside from the August 5 close. Of the 46 analysts covering the stock, the consensus remains a “Moderate Buy.”
Is Netflix in the Buy Zone?
The Netflix stock forecast suggests a stock that is close to becoming a value buy once again. While not a screaming bargain yet, Netflix’s correction from recent highs, combined with strong earnings and long-term growth potential, presents an intriguing opportunity for patient investors.
If NFLX dips slightly more, it could become even more attractive—especially as Wall Street reassesses its growth trajectory in advertising and premium content. For those with a long-term horizon, Netflix may soon re-enter the buy zone.
Netflix remains a dominant force in streaming with expanding revenue channels and a loyal user base. While near-term volatility persists, the long-term Netflix stock forecast still points to growth—making it one to watch closely.
Featured Image: Freepik © Flowo
