Buy This Stock-Split Growth Stock With 44% Upside, According to a Wall Street Analyst

Netflix (NASDAQ: NFLX) announced a 10-for-1 stock split on Oct. 30. The stock is down 13% since then, but history says it could rebound sharply in the coming months. Between 1980 and 2024, stocks that split returned an average of 25% during the 12 months following the announcement, according to Bank of America.

In general, Wall Street analysts think Netflix is undervalued. The median target of $115 per share implies 22% upside from its current share price of $94. Brian Pitz at BMO Capital is one of the most optimistic bulls. His target of $135 per share implies 44% upside.

Here's what investors should know about this stock-split stock.

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Netflix disappointed investors with its first-quarter report

Netflix announced first-quarter financial results that missed estimates on the bottom line. Revenue increased 16% to $12.2 billion and GAAP net income increased 84% to $1.23 per diluted share. Those numbers look excellent at first glance, but the stock has dropped 12% since the company's report last Thursday.

Why were investors disappointed? Earnings would have risen just 6% to roughly $0.70 per share had Netflix not collected a $2.8 billion termination fee related its deal to acquire Warner Bros. Discovery. So without that one-time benefit, the company missed Wall Street's consensus earnings estimate that called for $0.76 per diluted share.

In addition, Netflix gave somewhat lackluster guidance. In the second quarter, the company expects revenue to increase 13% to $12.5 billion, and net income to increase 8% to $0.78 per diluted share. Those projections left some investors wanting more because Netflix recently raised prices across all subscription tiers for U.S. viewers.

However, several Wall Street analysts see the post-earnings drop as a buying opportunity, noting that recent price increases should accelerate growth in the second half of 2026. David Joyce at Seaport Research actually raised his target price to $119 per share, up from $115, but noted the stock could hit $138 if Netflix's booming advertising business beats expectations.

Netflix has room to grow, and the current stock price is attractive

Streaming media is no longer the novel concept it was a decade ago, but Netflix still has room to grow. Its subscriber base (325 million paid members as of 2025) covers less than 50% of addressable households with smart TVs, its revenue represents less than 10% of its $670 billion addressable market, and its engagement time accounts for less than 5% of TV viewing time globally.

Netflix is well positioned to continue gaining share in those categories because of its content flywheel. With more monthly active viewers than any other streaming service, the company has a massive amount of user behavior data, which powers machine learning models that inform content development decisions and programming recommendations. That flywheel gives Netflix an edge in keeping viewers entertained.

Indeed, Netflix originals regularly top the charts. In 2025, Netflix made seven of the top 10 original streaming series and five of the top 10 streaming films. And a similar pattern is taking shape this year. In April 2026, Netflix made five of the top 10 original streaming series and five of the top 10 streaming films. The ability to produce quality original content affords the company pricing power.

Wall Street estimates Netflix's earnings will increase at 21% annually over the next three to five years. That makes the current valuation of 30 times earnings look very attractive. Patient investors should feel comfortable buying a position in Netflix stock today, and it would be sensible to add shares if the price continues to fall in the near term.

Bank of America is an advertising partner of Motley Fool Money. Trevor Jennewine 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.