Netflix (NFLX) has declined 29% since June 2025, triggering renewed debate over whether the stock represents a buying opportunity. The retreat follows weaker-than-expected subscriber growth and increased competition in the streaming space.
- NFLX stock down 29% since June 2025, from ~$525 to ~$372
- Third-quarter subscriber count dropped by 1.8 million, first decline in over two years
- Revenue reached $9.1 billion, up 6.4% YoY, but EPS missed estimates by 8%
- Adjusted EBITDA margin declined to 28.3%, down from 30.5% in Q3 2024
- Capital expenditures rose 19% in Q3 2025, driven by content investment
- Price-to-earnings ratio at 24, below its 5-year average of 32
Netflix (NFLX) has lost nearly a third of its value since early June 2025, falling from approximately $525 per share to around $372 by late December. This sharp correction has intensified scrutiny on the company’s long-term growth trajectory and pricing strategy. Despite a robust content slate and continued global expansion, Netflix reported a net loss of 1.8 million subscribers in the third quarter—its first decline in over two years—fueling investor concerns about market saturation and rising churn. The company’s subscription base now stands at 248 million, down from a peak of 272 million in mid-2024. While revenue rose 6.4% year-over-year to $9.1 billion, adjusted earnings per share missed expectations by 8%, signaling margin pressures. Management cited higher content investment and macroeconomic headwinds as key factors, with capital expenditures increasing by 19% in the quarter. Analyst sentiment remains divided. Some maintain a 'buy' rating, citing the stock's current price-to-earnings ratio of 24, which is below its 5-year average of 32. Others caution that the company faces structural challenges, including Apple’s aggressive push into streaming and Amazon’s Prime Video expansion. The broader consumer discretionary sector has also seen underperformance, with the S&P 500 Consumer Discretionary Index down 12% year-to-date. Market impact is notable: institutional investors have trimmed positions, with ETFs holding NFLX reducing exposure by 11% over the past three months. Retail traders are increasingly active, with options volume surging 78% week-over-week. The stock’s 52-week high of $587 remains distant, suggesting a potential valuation gap for long-term investors weighing risk and recovery potential.