Netflix, Inc.: Engaged in the debate

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Netflix, Inc.: Engaged in the debate

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Netflix, Inc.

Engaged in the debate

Maintain Rating: BUY | PO: 125.00 USD | Price: 73.37 USD

Bull Case: They have been here before 14 July 2026

Netflix shares are down ~20% YTD, which we believe reflects a combination of: (1) Equity

concerns related to engagement trends, (2) potential AI-driven disruption to content

Jessica Reif Ehrlich

creation and (3) heightened competitive concerns post recent media M&A. We Research Analyst

acknowledge these overhangs but note that Netflix has successfully navigated similar BofAS +1 646 855 2921

periods of skepticism. In 2022, subscriber growth slowed materially, particularly in the jessica.reif@bofa.com

U.S., contributing to a peak-to-trough share price decline of well over 50%. However, Brent Navon, CFA

management responded with a series of strategic initiatives, including paid sharing and Research Analyst BofAS

the ad-supported tier, both of which helped reaccelerate growth. Similarly, in late 2023, +1 646 855 3827

margin expansion became a concern for investors, yet Netflix subsequently delivered brent.navon@bofa.com

another year of strong operational execution and share price performance. While there PeterResearchHendersonAnalyst

are a range of potential outcomes for how Netflix's business model evolves from here, BofAS

+1 646 855 4564

the management team has consistently demonstrated an ability to adapt to changing peter2.henderson@bofa.com

market conditions, execute effectively and create long-term shareholder value. Indeed, David Plaus

we believe there remains a long runway for subscriber and advertising growth as Netflix Research Analyst

BofAS

remains a must-have service that is still ramping its ad engine, which, in combination +1 646 855 1572