Everyone Said It Was Too Late to Buy Netflix. They Were Wrong.

Netflix (NASDAQ: NFLX) has always had its fair share of skeptics, even while outperforming the stock market by a country mile. It always seems too late to buy the streaming pioneer's stock. And then it keeps rising in the long run.

Buckle up for a rocky ride

If you've owned Netflix stock for any length of time, you've probably stress-eaten your way through at least a couple of earnings reports. This thing moves, and it's not always obvious in which direction it's heading next.

As of April 7, Netflix stock is down 26% from its 52-week high. It has also nearly tripled in three years and soared 847% over the past decade. A beta value of 1.7 underscores the stock's volatile nature. The recent Warner Bros. Discovery (NASDAQ: WBD) buyout drama started a deep dip, followed by a partial recovery when Netflix backed out.

Patience is a virtue

The Warner Bros. episode reminds me of the Qwikster implosion of 2011. The stock market hated the very idea of breaking out the newfangled digital streaming service as a separate business, raising questions about red DVD mailers -- Netflix's proven money-maker at the time. The shares I bought in that dip are up more than 8,000% in 15 years and change.

NFLX data by YCharts

If you need your portfolio to behave predictably, Netflix will test your patience. If you can handle the turbulence, well, I've been happy with the long-term adventure.

The innovator's edge

Netflix dips may feel terrible in the moment, and then six months later, you wish you'd bought more. I can't guarantee the pattern will keep repeating forever, but it's already pretty predictable.

The financial media is asking hard questions about market saturation, limited growth prospects, and the ever-changing movie industry. If that sounds familiar, you may have been a Netflix investor in 2011, 2014, or 2022. Those are just random examples off the top of my head, reflecting the aforementioned Qwikster saga, the rocky international expansion in 2014, and the inflation crisis of 2022. There are many more instances of when heavy Netflix critiques set trend-bucking investors up for stellar long-term returns.

Image source: Netflix.

Here's the thing about time machines: Everyone wants one to go back and buy Netflix in 2011. But you didn't need a DeLorean with a flux capacitor in 2014, or 2018, or 2022. You just needed to tune out the noise and hold on to your Netflix stock. The best time to buy Netflix was always "too late," according to the doubters. And yet, somehow, it kept not being too late after all.

I'm not saying the next decade will look like the last one. But I'm betting Netflix can beat the market from this lofty perch, too. And remember, you're getting a 26% discount from last summer's all-time high.

Anders Bylund has positions in Netflix. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.