Netflix Stock Is Trading Near a 52-Week Low. Is It Finally a Buy?

Shares of streaming giant Netflix (NASDAQ: NFLX) have had a brutal year. The stock peaked near $134 in the middle of 2025, and it has since fallen roughly 46% to about $72 as of this writing, recently touching a fresh 52-week low. For a name that was one of the market's standout performers just a year ago, that is a stunning reversal.

So, is the beaten-down stock finally a buy? With the stock down and second-quarter results scheduled to be released July 16, this is a timely question worth consideration.

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What knocked Netflix stock down

Netflix's slide hasn't come from one bad headline so much as a steady stream of them.

Early this year, the company's agreement to acquire Warner Bros. from Warner Bros. Discovery fell apart when Netflix declined to top a higher rival bid. Though Netflix did walk away with a $2.8 billion termination fee. Around the same time, co-founder Reed Hastings stepped down as chairman at the June 4 annual meeting, closing out a nearly three-decade run.

The bigger blow came with first-quarter results on April 16. The quarter itself was strong. Revenue rose 16% year over year to $12.25 billion, and operating margin widened to 32.3% from 31.7% a year earlier. But after that solid start, management left its full-year 2026 outlook unchanged, still calling for revenue of $50.7 billion to $51.7 billion (12% to 14% growth) and an operating margin of 31.5%. For a stock that had climbed into the report, simply holding the line on its full-year revenue forecast was enough to trigger a sell-off.

Management also guided for second-quarter operating margin to step down about 1.5 points from the year-ago quarter, as content costs are anticipated to land heavily in the first half of the year before easing in the back half.

And then there's the more recent headline about media giant Fox agreeing to acquire the streaming platform and service provider Roku. Netflix was reportedly one of the bidders for Roku.

Some investors may interpret Netflix's recent interest in acquisitions as a sign that it needs to acquire other companies in order to remain competitive.

Is the sell-off a buying opportunity?

Step back from the noise, and the underlying business looks healthy.

Netflix's advertising revenue grew more than 2.5 times in 2025 to over $1.5 billion, and management expects it to roughly double again this year to about $3 billion. In markets where the ad tier is available, more than 60% of new sign-ups now choose it. The company also raised its full-year free cash flow forecast to about $12.5 billion and has resumed buying back stock after pausing during the Warner pursuit.

Then there's the valuation. At about $72, Netflix trades at about 23 times analysts' consensus forecast for its earnings per share this year -- the cheapest the stock has looked in years.

With this said, there's good reason for investors to be cautious. Revenue growth appears to be slowing -- from 16% in 2025 toward a guided 12% to 14% this year. And competition across streaming isn't letting up, making a big content budget a necessity to keep growing.

Still, for the first time in a while, the price looks reasonable. But I still wouldn't call the stock a bargain, and there's no guarantee we've found the bottom.

But for long-term investors who have wanted to own the streaming leader and balked at its premium, a price near a 52-week low -- on a business still growing revenue in the mid-teens and doubling its ad sales -- looks like one of the more reasonable entry points Netflix has offered in years.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix, Roku, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.