Netflix shares are down around 50% from highs while the S&P 500 index is up 13% year-to-date in 2026, creating an opportunity for investors who focus on the streaming mainstay’s growth and stock buyback program.
Netflix Revenue Grows as Shares Stay Below Peak
- Netflix shares sit roughly 50% below their peak while the S&P 500 has climbed 13% year-to-date in 2026.
- Global revenue grew 13% year over year last quarter to $12.6 billion, backed by strong double-digit constant-currency gains in Asia and Latin America.
- Management used $4.7 billion in the second quarter alone to repurchase stock, retiring outstanding shares as the price-to-earnings ratio hovers near 21.
Global Watch Hours and the Warner Bros. Studio Bidding Fallout
When a stock you own starts trailing the market, it can make you question why you own it. In 2026, anything not deemed an artificial intelligence winner has likely lagged the S&P 500 index. One stand-out laggard is Netflix, as The Motley Fool reported. The streaming mainstay faces a common narrative that it remains ripe for disruption by social platforms like Alphabet’s YouTube and AI-generated content. So far, however, this has not impacted its underlying financial performance.
Revenue climbed 13% year over year last quarter to $12.6 billion, accompanied by stable profit margins. While the company no longer reports overall subscriber figures, the business continues to capture global video streaming market share. In Asia and Latin America, constant-currency revenue growth exceeded 15%. Total watch hours grew only 2% year over year in the first half of 2026, but that figure is better than it looks because the World Cup took place in the second quarter—an event for which Netflix held no broadcasting rights. For the long term, Netflix continues to invest in diversifying its content library by adding sports, interactive streaming videos, and live talk shows, including popular podcasts.
Netflix Repurchases Stock After Failed Warner Bros Buyout
Earlier in 2026, Netflix engaged in a high-stakes bidding war for Warner Bros. Studio, planning an $83 billion buyout before losing out to Paramount Skydance. While the deal would have expanded its streaming library, investors reacted negatively to the pursuit, triggering a sell-off. Now operating without Warner Bros., Netflix has pivoted to deploying its cash to repurchase stock at a much lower price.
Outstanding shares have already fallen by 6% since the buyback program began, a pace that should accelerate given the depressed share price. The company deployed $4.7 billion to repurchase stock in the second quarter alone. Applying that rate over a full year means Netflix could retire 7% of its outstanding shares at its current market capitalization of $280 billion.
| Metric | Netflix (NFLX) Financial Data |
|---|---|
| Current Stock Price | $67.06 |
| Market Capitalization | $279 Billion |
| Quarterly Revenue Growth | 13% YoY (to $12.6 Billion) |
| Price-to-Earnings (P/E) Ratio | 21 |
| Q2 Share Buybacks | $4.7 Billion |
Netflix Outperforms Streaming Peers Through Diversified Content
By selling diversified content to a global subscriber base, Netflix sits in a much better position than its peers to profit from video streaming. Legacy players like Paramount Skydance and Disney have struggled to gain share in video streaming and maintain much weaker balance sheets than Netflix. With roughly half of United States watch hours going to streaming today—and even lower shares in select international markets—Netflix maintains a sustained demand tailwind that funds ongoing reinvestment while competitors scramble to turn a profit.
The advertising tier also drives revenue. Although Netflix entered the advertising game late, it has made a steady push for cheaper ad-supported subscription tiers to drive engagement and revenue. While it remains a small part of the business today, the ad tier should help accelerate revenue growth in the years ahead, providing extra capital to fund major acquisitions such as sports rights. Trading at a price-to-earnings ratio of 21, the stock sits at one of its lowest historical levels while delivering double-digit revenue growth and aggressive share retirement.
