Netflix(NASDAQ: NFLX) operates the world’s largest streaming platform for movies and television shows. The company ended 2025 with a record number of subscribers, a record amount of revenue, and record earnings, yet its stock has plummeted by 41% from its all-time high from last June.
Netflix is in a fierce bidding war to acquire Warner Bros. Discovery(NASDAQ: WBD). The deal would add an entire slate of high-quality content to the Netflix platform, but it could come at a hefty cost of $82.7 billion (or more), and it’s already facing intense scrutiny from regulators. Investors don’t like uncertainty, which might explain why many of them are waiting on the sidelines for now.
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Netflix stock is currently the cheapest it has been in three years, and it’s even trading at a discount to the Nasdaq-100 technology index. If we zoom out, the stock is still sitting on a whopping 73,400% gain since its initial public offering (IPO) in 2002. Since its business continues to fire on all cylinders, the recent dip might be a small bump in the road ahead of further gains in the future. Investors rarely get the chance to buy this stock at such a steep discount, so is it time to make a move?
Image source: Netflix.
Netflix ended 2025 with a record 325 million paying subscribers, so it’s miles ahead of its nearest rivals, Amazon Prime and Disney‘s Disney+, which have 200 million and 131.6 million members, respectively. Netflix owes its dominance to its industry-leading content budget, but also to its diverse subscription tiers, which appeal to consumers of all income levels.
In late 2022, Netflix launched a new membership option with a heavily discounted price, which is supplemented by advertising. At just $7.99 per month, it’s much cheaper than the platform’s Standard ($17.99 per month) and Premium ($24.99 per month) tiers.
While a cheaper tier sounds bad for Netflix’s financial results, each member in this category actually becomes more valuable over time, because the company can charge more money for ad slots as the subscriber base grows. Additionally, Netflix has invested heavily in live content like boxing matches, National Football League (NFL) games, and even weekly World Wrestling Entertainment (WWE) programs, which attract premium ad prices.
Netflix generated $45.2 billion in total revenue during 2025, and although advertising accounted for just $1.5 billion of that figure, it grew by a whopping two and a half times compared to 2024. Management expects ad revenue to double again in 2026 to around $3 billion, so it’s quickly becoming an important part of the business.
The proposed acquisition of Warner Bros. Discovery could supercharge Netflix’s ad revenue even further because of its elite content slate. Warner Bros. owns the rights to successful movie franchises like The Lord of the Rings, The Hobbit, and Harry Potter, in addition to smash-hit television shows like Friends, The Sopranos, and The Big Bang Theory.
Warner Bros. also owns the HBO Max streaming service, which has 128 million paying members. So while Netflix is dominant now, it will be almost untouchable if this deal goes through. For that very reason, the U.S. Department of Justice is probing the deal to determine if it will give the streaming giant too much power. The government doesn’t like it when companies acquire a significant market share in a particular industry, because it gives them the ability to dramatically raise prices to the detriment of consumers.
As I mentioned earlier, the Warner Bros. deal has placed a cloud of uncertainty over Netflix stock. The proposed $82.7 billion price tag could dent Netflix’s future earnings, especially if the company uses a substantial amount of debt financing (because of the ongoing interest costs). However, it will almost certainly pay off over the long term as economies of scale kick in.
As a result, the 41% decline in Netflix stock could be a great buying opportunity. Based on the company’s 2025 earnings of $2.53 per share, its stock is trading at a price-to-earnings (P/E) ratio of 31.1, which is the cheapest level since early 2023. Plus, it represents a modest discount to the P/E ratio of the Nasdaq-100, which is currently 31.6. In other words, Netflix looks cheap relative to a basket of its big-tech peers.
But it gets better. Wall Street’s consensus estimate (provided by Yahoo! Finance) suggests that Netflix will grow its earnings to $3.12 per share in 2026, relying on its existing business alone. That places its stock at a forward P/E ratio of just 25.1.
Therefore, this is one of those rare cases where a stock might be a good buy for both its short and long-term potential. However, there’s no doubt that investors who are willing to keep Netflix in their portfolios for a period of at least three to five years will probably reap the greatest rewards, especially if the Warner Bros. deal goes ahead.
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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Netflix, Walt Disney, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
Bigg Boss 17 has picked up from its first week itself. A lot of drama has already taken place inside the house. Several fights, groupism, relationship issues and more – Bigg Boss 17 house is already on fire. Two weeks are done and we have seen a lot of drama. Adding to this, Udaariyaan actor Samarth Jurel is going to enter the show. He is the first wildcard contestant to be a part of Bigg Boss 17. Within two weeks, a wildcard contestant is going to mark entry and bring a major twist. He is said to be Isha Malviya‘s boyfriend and that is going to trigger Abhishek Kumar and how! Also Read – Bigg Boss 17: Did Isha Malviya blatantly deny dating Samarth Jurel in front of Abhishek Kumar? Watch VIRAL VIDEO
Samarth Jurel enters Bigg Boss 17 house; leaves Isha Malviya, Abhishek Kumar in shock
In the new promo video of Bigg Boss 17, we get to see Samarth Jurel’s dhamakedaar entry. Bigg Boss gets Abhishek Kumar and Isha Malviya in a separate room and shows their picture. It is then replaced by Isha and Samarth’s image. Bigg Boss states that Isha Malviya’s boyfriend is now entering the house and Samarth Jurel marks his entry. Abhishek Kumar has a major emotional breakdown. He weeps and how in front of other contestants. Then Isha and Samarth have a showdown of sorts. Isha refutes to accept that she is Samarth’s girlfriend and that they are in a relationship. Samarth goes on to say that she is lying whilst standing in front of him. Also Read – Bigg Boss 17 Weekend Ka Vaar: Salman Khan BLASTS Vicky Jain, chills with Arbaaz Khan, Sohail Khan – Here’s what to expect
The game is going to change and how. Abhishek Kumar is very emotional when it comes to Isha Malviya. He has openly confessed that he has feelings for her. Their fight began from premiere night itself while they were on stage with Salman Khan. Isha accused Abhishek of violence and more. In the past two weeks, Abhishek and Isha’s bond has witnessed many ups and downs. Will Samarth Jurel and Isha Malviya’s relationship sort out? It is definite that high-voltage drama and fights are awaiting Bigg Boss 17 house. For more entertainment news, stay tuned to BollywoodLife.com. Also Read – Bigg Boss 17: Munawar Faruqui’s modus operandi to win reality show exposed
Bigg Boss 17 is here to entertain all. The show has been successfully running for the last 16 seasons and going by the drama unfolding in the latest season, fans are calling Bigg Boss 17 a hit already. Within a week, Bigg Boss fans have chosen their favourite teams and social media war between fans have already begun. Today’s episode of Bigg Boss 17 was a high-voltage one as a big fight took place between Mannara Chopra and Ankita Lokhande. In between all of this, fans got to see the soft side of Munawar Faruqui. Also Read – Bigg Boss 17: Mannara Chopra BLASTS at Ankita Lokhande over kitchen duties; calls her ‘cheap, arrogant, cunning’ [WATCH]
Munawar Faruqui has declared that he will always support and protect Mannara Chopra. They share a friendship that is being noticed by all and is being discussed in entertainment news. A few housemates even tease Munawar with Mannara. In today’s episode, when Mannara Chopra was chopping vegetables, Munawar took notice of it and asked Jigna Vora to help her. He was concerned that she may get hurt. However, post the fight with Ankita Lokhande, Mannara lashed out at Munawar too. He tried to sort it out but she wasn’t in the mood. After Mannara calmed down, she spoke to Munawar and hugged him. Fans who are already shipping for MunAra are going crazy over this hug and calling them a ‘vibe’. A fan also stated that their bond is an emotion. Also Read – Bigg Boss 17 elimination: This contestant to become the first celeb to be evicted from the show?
Check out fans’ tweets about Mannara Chopra and Munawar Faruqui below:
Talking about Mannara Chopra and Ankita Lokhande’s fight, it started with latter calling the former ‘bacchi’. It did not go down well with Mannara and she just started ranting against Ankita Lokhande. Mannara called Ankita cheap, dominating, arrogant and what not. Though Ankita tried to sort things out with her but instead Mannara called her cunning. Rinku Dhawan, Munawar Faruqui, Khanzaadi and others tried to make Mannara understand that Ankita Lokhande did not mean it any other way but she was in no mood to listen. Their fight was the highlight of today’s episode. Further, Ankita Lokhande and Abhishek Kumar also got into an argument over wasting food. Let’s wait and watch what happens next in Salman Khan‘s show.
