Can Netflix Stock Beat the Market?

Netflix (NFLX +10.41%) shares have taken a wild ride recently.

The media-streaming pioneer rose to all-time highs in the first half of 2025. At the end of June, the stock had doubled in 52 weeks and tripled in two years.

But the peak pricing didn’t last. Share prices fell 13% in July 2025, mainly because of lofty valuation multiples. The price drop accelerated as Netflix launched a buyout bid for film studio Warner Bros. Discovery (WBD 2.10%), first in the rumor mill and then in the real world. As it turns out, Netflix wants to wait until the studio spins off its cable TV channels under the Discovery umbrella and then buy the remaining Hollywood veteran and its streaming services for $27.75 per share.

As of Feb. 25, 2026, Netflix’s stock is down 38% from last June’s peak. Is this the beginning of a long downtrend, or can Netflix beat the market from here?

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NASDAQ: NFLX

Netflix

Today’s Change

(10.41%) $8.81

Current Price

$93.40

Key Data Points

Market Cap

$357B

Day’s Range

$90.58 - $94.41

52wk Range

$75.01 - $134.12

Volume

3.6M

Avg Vol

48M

Gross Margin

48.59%

Where is Warner Bros. going?

The Warner Bros. buyout project is in limbo. Netflix is locked in a bidding drama with Paramount Skydance (PSKY +19.01%), which currently offers $31 per share for the whole company. Netflix allowed Warner’s board of directors to consider the latest Paramount offer, but it’s really up to Warner Bros.’ shareholders at this point.

They will vote for or against the Netflix bid on March 20, while the Paramount approach is structured as a hostile takeover attempt, to be settled when shareholders vote for board seats at the next annual meeting.

The outcome of these votes, followed by regulatory reviews, will have game-changing effects on Netflix’s business. The company could bolster its film production assets and content library while taking on a massive debt load to pay for the Warner Bros. buyout. Or, it could walk away from the deal-making table with a stronger rival in Paramount but $2.8 billion richer as the breakup fee kicks in.

Netflix’s stock is falling mostly because of the potential for a costly win. The stock chart ticked upward last week as Paramount raised its bid and Netflix gave the target company permission to discuss it. In other words, Netflix’s stock rose because the probability of winning the buyout tussle was going down.

Image source: Netflix.

The Qwikster playbook, 2026 edition

Either way, Netflix remains an entertainment powerhouse with a bright future. Wall Street’s skepticism has resulted in a much lower valuation, with the price-to-earnings multiple (P/E) dropping from 62.5 last summer to 32.7 this week.

It’s like a milder version of the Qwikster episode in 2011. Netflix presented its all-digital future in a clumsy way, and the resulting 69% drawdown opened a fantastic buying window for long-term investors who believed in the newfangled streaming idea.

Netflix is attempting another strategy shift right now and the market doesn’t like the attempt. With or without Warner Bros. under its belt, I expect Netflix to continue dominating the global video-streaming market for years to come. As a result, the stock should recover from this trough when the Warner Bros. drama is over.

One day, Netflix will probably make documentaries and dramedies about this buyout match. Buy now, and you’ll have a stake in the story before they film it.