Netflix Stock Is Near 2021 Levels, and Bulls See 4 Reasons to Care

Key Points

• Netflix shares have fallen sharply from their 2025 high, pushing the stock’s valuation much lower despite continued revenue growth.
• Netflix’s first-quarter results showed stronger revenue, operating income and full-year margin guidance, supporting the bullish case.
• Netflix still faces technical weakness and competition concerns, but buybacks and analyst support could help stabilize sentiment.

Not many stocks in the mega-cap space have had the kind of year Netflix Inc NASDAQ: NFLX has. Once one of the market's biggest darlings, the stock has fallen hard after reaching record highs in 2025. The streaming giant recently traded just above $73 after a 10-for-1 stock split took effect in November 2025, leaving shares down nearly 45% over the past 12 months and about 30% since mid-April on a split-adjusted basis.

At that price, Netflix is back near levels last seen in 2024 and only modestly above its split-adjusted 2021 trading range. For a business that continues to grow revenue, expand margins and return capital through buybacks, that price action raises a fair question: Has the market overreacted to the downside?

The bulls would argue that it has. When investors look beyond the weak chart, there is a compelling case that Netflix at these levels deserves renewed attention.

1: The Valuation Is Almost Impossibly Cheap

The first, and arguably most important, part of the bullish argument is what has happened to Netflix's valuation. The stock is currently trading at roughly 23 times earnings, which is close to the cheapest it has ever been. To put that into context, the stock was traded with a price-to-earnings ratio above 50 for much of last year, which makes the current multiple look like a bargain for a business of this scale.

The thing is, you'd actually be forgiven for thinking this kind of valuation belongs to a struggling business with declining sales. In reality, Netflix is doing anything but struggling.

The fundamentals are heading in exactly the opposite direction to the share price, which is precisely the setup that tends to reward patient investors handsomely.

2: The Business Is Generating Record Revenues

The second reason to pay attention is that Netflix is at this point focused on fundamentals, as the business is currently executing arguably better than it ever has. Revenue is at an all-time high, and the company has made a series of strategic moves in recent quarters that are strengthening the long-term story.

The rollout of the ad-supported tier has become a meaningful contributor to revenue at higher margins than the traditional subscription business. The decision to walk away from the Warner Bros. Discovery, Inc. NASDAQ: WBD acquisition, which at first glance looked like a defeat, is now widely viewed as a smart discipline call that has left the balance sheet in strong shape and freed up capital for aggressive buybacks. Based on the recently authorized $25 billion share repurchase program alone, it's clear management sees the same value in the shares that the bulls do.

3: Netflix Stock Looks Deeply Oversold on Technical Signals

The third piece of the puzzle is what the chart is telling investors. Netflix's relative strength index (RSI) sank as low as 20 in recent weeks, which is deep into the oversold territory that often precedes a low.

It's since recovered slightly to around 33, but the more important development is that the stock appears to have also started stabilizing and forming a small base over the past 10 days.

Combined, the two suggest that the sellers may finally be running out of steam. When a stock as high-quality as Netflix drops this hard, this fast, and hits genuinely extreme oversold readings, it's usually not long before the buyers step back in.

4: Analysts Stay Bullish on Netflix Despite the Sell-Off

Backing all this up is the fact that many analysts have remained constructive even as some have trimmed their targets. For example, Jefferies lowered its price target on Netflix last month but retained a Buy rating, while MoffettNathanson also cut its target and maintained a Buy rating. More broadly, the consensus price target implies more than 50% upside from recent levels, suggesting Wall Street still sees meaningful room for a recovery despite the sell-off.

For investors willing to pinch their nose and ignore the stock’s chart from the past year, Netflix could easily end up being a candidate for the comeback play of the year. It offers a rare combination of a rock-bottom valuation, all-time high revenue, expanding margins, aggressive buybacks, and technicals that are just starting to turn. While the chart might be telling investors to be cautious, everything else about Netflix is saying something rather different.