Should You Invest $100 in Netflix Right Now?

Source The Motley Fool

Key Points

  • Netflix shares are taking a hit, but they still trade at a steep P/E ratio.

  • This is a wonderful business, so investors should watch closely and wait for a more attractive entry point.

  • 10 stocks we like better than Netflix ›

Netflix (NASDAQ: NFLX) deserves credit for spearheading the world's shift away from cable TV and toward streaming. It's the leader in that market, with a global presence, massive user base, pricing power, and sizable profits.

Should you invest $100 in this dominant streaming stock, which trades 29% below its peak (as of Dec. 12), right now?

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Building with Netflix logo on top.

Image source: Netflix.

Netflix is an expensive stock

This stock has performed exceptionally well in the past, soaring 701% over the trailing-10-year period. This is despite the fact that shares have dropped considerably from their all-time high. Netflix missed Wall Street estimates when it reported Q3 financials. And the market looks to be concerned about the company's proposed takeover of Warner Bros. Discovery.

Even after the dip, the stock is expensive. It trades at a price-to-earnings ratio of 40. This is the main reason investors shouldn't add Netflix to their portfolios right now.

Keep the stock on your watch list for now

This doesn't mean investors should completely forget about Netflix. This is a high-quality company. It has a cost advantage, which helps it collect lots of net income and free cash flow while it also spends aggressively on content. And there is still meaningful growth potential, particularly in international markets.

It's best to watch the stock and wait for a better entry point.

Should you buy stock in Netflix right now?

Before you buy stock in Netflix, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Netflix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $513,353!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,072,908!*

Now, it’s worth noting Stock Advisor’s total average return is 965% — a market-crushing outperformance compared to 193% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of December 16, 2025.

Neil Patel 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.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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