Netflix Stock Is Down 26% in 2026. Is This the Ultimate Buying Opportunity, or Is More Downside Ahead?

Shares of Netflix (NASDAQ: NFLX) recently closed at approximely $69, putting the streaming giant down 26% in 2026. The slide is part of a longer and more painful 48% decline over the past year or so. Netflix has generated life-changing returns for investors, so it has a strong reputation on Wall Street and hasn't fallen this far very often in the past decade.

But catching falling knives can be a dangerous game. What seems like the ultimate buying opportunity can easily punish overeager buyers. Here's what to make of the company after its latest plunge following its second-quarter earnings report release last week.

Image source: The Motley Fool.

Wall Street is sounding the alarm on slowing growth

The market saw Netflix as a fast-growing darling for years. However, those days might be over. Netflix's revenue growth is suddenly slowing. Revenue grew by 17.6% in the fourth quarter of 2025, followed by 16.2% in the first quarter of 2026, and 13.4% in the second quarter. Making matters worse, management guided for only 11.7% growth in the current quarter, yet another deceleration. Wall Street tends to emphasize quarterly performance, which is working against Netflix at the moment, to be sure.

That's not always healthy, especially for long-term investors. That said, Netflix's slowing growth is definitely becoming a trend. It's worth considering the competitive landscape Netflix must contend with, which includes video games and social media, not just other streaming services. Unfortunately, it's not yet clear whether this is a blip for Netflix or if the business has peaked. Making that distinction will be even harder due to Netflix's decision to offer less transparency into subscriber and viewership data.

Here's why the selling might be overdone

Multiple things can be true. Netflix absolutely deserves a lower valuation if its growth is stalling. At the same time, the market might be taking things too far. Even as parts of the business mature, Netflix could still have a very long runway to monetize its users. The company has delved into live sports over the past few years and is monetizing price-sensitive subscribers through ad-supported memberships.

It's also worth mentioning that Netflix hasn't had very many blockbuster hits recently. That's not ideal, but the next Squid Game or KPop Demon Hunters sensation could suddenly reignite growth at any given moment.

In the meantime, the stock has fallen to just 19 times 2026 earnings estimates. Analysts still see Netflix growing earnings by an average of 21% to 22% annually over the next three to five years. Buying Netflix here is probably a home run if the company grows even close to that. Even assuming annualized growth comes in closer to 10%-12%, the stock could still deliver solid long-term returns from its current price point.

Is this the ultimate buying opportunity? Perhaps not; the stock could easily go lower. But it's easy to like Netflix stock here.

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.