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Netflix reported second-quarter revenue of $12.56 billion, falling short of the $12.58 billion estimate, while free cash flow declined to $1.53 billion from $2.27 billion in the prior period.
The stock, trading at $71.57, has dropped 41.06% over the past year, a decline that follows the collapse of the Warner Bros. deal, slower viewing growth, and the termination of the Paramount-Warner merger.
Investors remain divided on whether the current valuation reflects a buying opportunity or a justified discount.
Netflix trades at a forward P/E of 19 and a PEG ratio of 1.219, multiples that appear low given management's guidance for fiscal year 2026 revenue of $51.0 billion to $51.4 billion and an operating margin of 31.5%.
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