Since April 2025, Netflix has been in a holding pattern, posting a small loss of 2.2% while floating around $1,101. The stock also fell short of the S&P 500’s 23.9% gain during that period.
Given the weaker price action, is now a good time to buy NFLX? Or should investors expect a bumpy road ahead? Find out in our full research report, it’s free for active Edge members.
Why Are We Positive On NFLX?
Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.
1. Global Streaming Paid Memberships Skyrocket, Fueling Growth Opportunities
As a subscription-based app, Netflix generates revenue growth by expanding both its subscriber base and the amount each subscriber spends over time.
Over the last two years, Netflix’s global streaming paid memberships, a key performance metric for the company, increased by 14.1% annually to 317.2 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction. 
2. Outstanding Long-Term EPS Growth
Analyzing the change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Netflix’s EPS grew at an astounding 29% compounded annual growth rate over the last three years, higher than its 11.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Increasing Free Cash Flow Margin Juices Financials
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, Netflix’s margin expanded by 18.4 percentage points over the last few years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability. Netflix’s free cash flow margin for the trailing 12 months was 20.7%.
Final Judgment
These are just a few reasons Netflix is a rock-solid business worth owning. With its shares lagging the market recently, the stock trades at 28.9× forward EV/EBITDA (or $1,101 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
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