Is Netflix Stock a Buy, Hold, or Sell in March?

With its shares already down roughly 28% from an all-time high of $134 reached in mid-June, Netflix (NASDAQ: NFLX) has faced significant challenges over the past few months. The situation came to a head in late 2025 when its management revealed plans to acquire the studio and streaming assets of Warner Bros -- a move some analysts feared could undermine shareholder value by loading Netflix's balance sheet with debt.

However, in late February, Netflix withdrew its bid for Warner Bros, allowing skeptical investors to rest a little easier. Let's explore what this stunning reversal might mean for the company's stock in March and beyond.

What went wrong with Netflix's plan?

It looked like a done deal. On Dec. 5, Netflix announced that it would acquire Warner Bros. for a total enterprise value of $82.7 billion (including taking on its debt). The acquisition would have given the combined company access to Warner Bros.' iconic intellectual properties like Harry Potter, the DC Comic Universe, and Game of Thrones, along with the tools to monetize them more effectively through Netflix's streaming empire.

But despite the clear synergies, the market reacted extremely negatively to the proposal, sending Netflix shares down double-digits and prompting analyst downgrades. It's easy to see why investors were skeptical.

According to research from Fortune magazine, a whopping 70%-75% of acquisitions fail to create shareholder value for the acquiring company. And with a target as large as Warner Bros., the stakes were quite high. Even if operational results improved, it could take years or even decades to defray the cash and debt used to make the deal. Investors are comparing these prospects to other, less risky uses of the capital, such as buybacks, which could have a bigger impact on stock performance.

With all that in mind, the market reacted positively this week when Paramount Skydance raised the stakes by offering $110 billion for Warner Bros. Netflix had the right to make a higher counteroffer; however, management decided to withdraw instead, saying the deal was no longer financially attractive enough for it to pursue.

What comes next for Netflix?

Right now, it looks likely that Paramount Skydance will eventually merge with the studio and streaming assets of Warner Bros. This acquisition could make Paramount a much more serious competitor in the video streaming market by giving it access to a library of well-known intellectual property assets and more robust film and television production capacity through its vast network of movie studios and industry connections.

Image source: Getty Images.

For Netflix, this could mean that customers have more alternatives for high-quality streaming subscriptions. That said, Paramount and Warner Bros are already competing with Netflix as separate companies. And it remains unclear how the combination will change the overall dynamics.

The Wall Street Journal reports that Netflix may actually be the winner in this situation because it will receive a $2.8 billion termination fee while avoiding complicating its business model. Most importantly, now that the streaming giant has backed out of the acquisition deal, investors can refocus on its strong fundamentals and long-term growth drivers.

Is Netflix stock a buy, sell, or hold in March?

Going forward, Netflix's stock performance will likely depend on its earnings. The numbers remain encouraging, with first-quarter revenue forecast to jump 15.3% year over year to $12.2 billion, with an expected operating income of $3.9 billion (up 17% from the prior-year period).

While the company is likely near saturation in developed markets like North America and Western Europe, it can still drive continued top and bottom line growth with monetization strategies like advertising. Advertising represented a modest $1.5 billion in 2025 revenue, but management expects this to double to $3 billion in 2026. And over the coming years, it will likely become one of Netflix's core revenue streams.

Now that the controversial acquisition is off the table, Netflix's recent stock price declines look like a good buying opportunity for long-term investors.

Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.