Netflix shares are down 25% in 2026, against average annual gains of 21% over the past 15 years. A Motley Fool analysis says the company’s growth appears to be slowing while its forward price-to-earnings ratio of 22 sits below a five-year average of 31.
Netflix shares are down 25% in 2026, after the streaming company averaged annual gains of 21% over the past 15 years. The Motley Fool’s Selena Maranjian sets that drop against a business whose growth appears to be slowing and against valuation ratios that now sit below their own five-year averages.
The stock’s forward-looking price-to-earnings ratio of 22 is below its five-year average of 31. Its recent price-to-sales ratio of 6.1 also sits under an average of 6.5.
Those two multiples carry the valuation argument in the piece, which says the shares seem reasonably valued at recent levels.
Per Evoca.tv, Netflix’s recent U.S. streaming market share was 21%, against 22% for Amazon Prime Video. The company has boasted about its reach across more than 190 countries: “We are entertaining over half a billion people in more than 190 countries”.
In its second quarter, Netflix posted revenue rising 13% year over year and net income up 9%. The company has been broadening its offerings with live sports broadcasts, games and podcasts.
Management, meanwhile, walked away from deals with Warner Bros. Discovery and Roku after choosing not to match the winning bids from Paramount Skydance and Fox. Netflix has also been buying back 13.5 million shares in the last quarter, which the analysis says rewards shareholders.
Set against that, the piece lists two worries about Netflix stock. There have been reports of Netflix losing viewers between seasons of various shows, because the wait for the next season runs too long.
Some also worry the company is relying on price increases for growth more than it should.
Source: The Motley Fool
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