Netflix (NASDAQ:NFLX) shares recently plunged amid weak quarterly results, a slowdown in revenue growth, and weak guidance. But long-term investors say now is the best time to buy the stock.
First, let’s understand what’s plaguing Netflix. Netflix is facing threats from short-form video platforms like TikTok and Reels, plus YouTube and YouTube TV, which bulls see as bigger competitive threats than traditional streaming rivals.
Growth Catalysts for Netflix Stock
But bulls believe live events are the biggest growth catalyst for Netflix, and management is executing on that. Management has indicated that live programming does a lot of lifting for the business even though it produces fewer raw viewing hours than regular content. That’s why the company is planning to shift its engagement reporting from quarterly to annual. Bulls say that is not a sign of weakness, that’s a signal Netflix is doubling down on live events.
Some examples of live programming already delivering results are the World Baseball Classic and the Home Run Derby, with the World Baseball Classic driving Japan’s highest number of new sign-ups ever and helping push APAC growth to 19.8%.
Bulls are upbeat on Netflix’s ad business. They believe live events will give a huge boost, too. Why? They point to Fox’s ad pricing as a benchmark. Netflix now streams NFL games itself, not ads on other networks’ games. This season Netflix airs five regular-season games, four in fiscal year 2026, including Niners vs. Rams, Packers vs. Rams, and a Christmas Day doubleheader with Packers vs. Bears and Bills vs. Broncos.
A single 30-second spot in Fox’s top window sold for about $1.1 million, and a game in that slot brought in $40 million to $50 million in ad revenue. Streaming NFL games also pull 66% stronger ad results than regular broadcast and cable. Based on that, bulls think Netflix’s NFL games could add $200 million to $250 million in ad revenue, on top of the $3 billion ads target the company already gave for 2026.
Photo by Souvik Banerjee on Unsplash
Why This Crash is The Best Buying Opportunity for Investors?
Bulls say Netflix’s crash isn’t new, and this is an opportunity they’ve seen before. In 2022, the stock plunged more than 50% after losing subscribers for the first time in a decade and guiding for a further loss the next quarter. Management responded by cracking down on password sharing and launching the ads tier, something founder Reed Hastings had previously opposed. Free cash flow went from $1.6 billion in 2022 to $6.9 billion in 2023 as a result.
Sands Capital Select Growth Strategy stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its Q1 2026 investor letter:
“Netflix, Inc. (NASDAQ:NFLX) shares rose after the company walked away from a proposed acquisition of Warner Bros. Discovery. While we viewed the deal positively, the uncertainty had weighed on sentiment, and Netflix will receive a $2.8 billion break fee. We believe the company is now better positioned to exceed guidance and resume share repurchases. The stock also trades below 30 times forward earnings, a level rarely seen over the past 15 years. Fourth-quarter 2025 results included several positives. Management tacitly endorsed a leaked long-term forecast of reaching a $1 trillion valuation by 2030. Advertising revenue exceeded expectations, and net subscriber additions surpassed 23 million in 2025. We see upside potential to 2026 growth guidance of 12 percent to 14 percent, driven by management’s typical conservatism, consensus underestimation of United States and Canada revenue, and strength in advertising revenue.”
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