Why I Bought More Netflix Stock Near 52 Week Lows | NFLX Stock Analysis

Parkev Tatevosian, CFA•Oct 8, 2026

Summary

Parkev provides a thorough analysis of Netflix's financial health, noting that the company has transformed into a highly profitable entity with an operating margin of 30.25%. Parkev emphasizes that while revenue growth is expected to decelerate from 13.6% in 2026 to 10% in 2028, this growth remains organic and is driven by price increases and monetization strategies rather than discounts. Parkev points to the company's Return on Invested Capital (ROIC), which has surged from 3% in 2017 to over 30%, as a key indicator of management's success.

Parkev also addresses the risks facing the business, specifically the structural shift in consumer behavior toward short-form content like TikTok and YouTube Shorts. Parkev is concerned that declining attention spans could make long-form movies and series less valuable over time. Additionally, Parkev criticizes the management's decision to stop reporting subscriber numbers, suggesting that transparency would improve investor sentiment.

Netflix (NFLX): Parkev identifies Netflix as a top pick, trading at a forward P/E ratio of 17.7, which Parkev considers very cheap for a company with its performance history. Parkev calculated a fair value for the stock at $115 per share, indicating an upside potential of over 71% from the current price near the 52-week low of approximately $67. Parkev has recently increased the position in Parkev's portfolio, making it Parkev's largest holding, and Parkev remains interested in adding more if prices remain at these levels.

Mentioned Stocks

NFLX

Sentiment: BUYAction: BOUGHT

Reasoning: Parkev rates Netflix as a buy because it trades at a low forward P/E of 17.7 despite having record-high operating margins and an ROIC exceeding 30%. Parkev notes that the company is successfully growing revenue organically through password-sharing crackdowns and price hikes. Parkev calculates a fair value of $115 per share, which is over 71% above the current market price of around $67. Parkev explicitly stated that Parkev used the recent dip to increase the position, making it the largest holding in Parkev's portfolio.

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