Netflix Stock Is on Track for Its Worst Year Since 2022. Is It Finally a Buy?

NFLX is down 27% in 2026, putting it on pace for its worst annual performance since 2022, even as the business keeps posting double-digit growth.

The fundamentals remain solid. Q3 revenue rose 12% to $12.9 billion, and operating income climbed 37%. Operating margin hit 34.6%. The pressure point is deceleration: revenue growth is slowing, and NFLX cut its 2026 ad revenue guidance from $3 billion to $2.7 billion, a 10% reduction.

That guidance cut is the clearest catalyst behind the market's caution. The stock's valuation now reflects it. At a P/E of 17-18, NFLX trades in line with the S&P 500, despite growing revenue at double digits and running a roughly 35% operating margin.

Interpretation: the market appears to be pricing NFLX as an average-growth company rather than one with premium margins. If revenue growth holds in the low double digits, that valuation gap looks like the core of the bull case. If deceleration continues and ad targets slip further, the multiple could stay compressed.