3 Reasons Netflix Will Remain a Great Stock to Buy

If you want to watch a drama unfold, you can stream a movie on Netflix (NASDAQ: NFLX), or you can read the latest headlines regarding the company's attempt to buy Warner Bros. Discovery (NASDAQ: WBD). At the beginning of December, Netflix announced a $72 billion bid to buy Warner Bros., which also owns HBO Max.

While there are still plenty of antitrust hurdles for the acquisition to overcome, Paramount Skydance (NASDAQ: PSKY) has entered the chat as well. The rival conglomerate mounted a hostile $108 billion bid. There's a lot of uncertainty in how this story will end.

Whether Netflix gets its fairytale or not, the stock will remain a great company to buy for three reasons: international subscriber growth, expanding margins, and new revenue streams. The success of a potential acquisition is just one part of the company's future, and won't make or break the stock.

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Subscribers around the world

Long gone are the days of the DVD rent-by-mail service. Netflix is a global enterprise. The streaming service is now in 190 countries and in 50 languages. Netflix also famously cracked down on sharing subscriptions, which has had a positive effect on net new subscribers.

Netflix's global reach enabled the company to focus on building its regionalized content and original programming. This further drives its retention and international growth strategy. The number of subscribers in the U.S. and Canada is likely near saturation, but there's still plenty of room for growth in Asia, Europe, Latin America, and beyond.

A more profitable business

Netflix's margins are improving year over year and are among the highest in the streaming industry. In the third quarter of 2025, Netflix missed its margin guidance, but it was due to an expense related to a dispute with Brazilian tax authorities. Removing that expense means Netflix would have exceeded expectations.

The third-quarter margin was also more than 4% higher than last year's corresponding period. Netflix continues to produce its own content in a cost-effective and efficient manner, which should push margins northward in future years as well.

Netflix's total revenue, earnings per share, and earnings before interest, taxes, depreciation, and amortization (EBITDA) metrics all continue to improve year over year as well. Netflix has been a well-run machine on an upward trajectory over the last few years. The company knows its global strategy is working and will continue to execute.

Economic slowdowns and competitive pressure from fellow mega-streamers Amazon and Apple are always a concern, but it shouldn't stop investors from seeing a bright Netflix future.

New content and revenue streams

Acquiring Warner Bros. would mean solidifying Netflix's status as the preeminent streaming service, widening its lead among the big three streamers. However, Netflix has other revenue-producing irons in the fire to continue growing its dominance.

Netflix's ad-supported tier is growing steadily after launching three years ago. The company reported it is now on track to double ad revenue in 2025. As of the beginning of 2025, more than half of new subscribers to Netflix were choosing the ad-supported tier.

Netflix is also leaning into its gaming operations. In November, the company announced new party games, including classics such as Pictionary. Evolving into a gaming platform as well as a streaming one could mean substantial new revenue as the gaming industry's total market surpasses $300 billion.

There are other monetization opportunities for Netflix in the form of live events, sports, and even merchandising. Hits such as Stranger Things and KPop Demon Hunters have apparel and more for sale on Netflix's website. Netflix also hosts live sporting events, including WWE matches, NFL games, and, beginning in 2026, MLB games.

Netflix will win the streaming wars

Netflix will win the streaming war if it can continue improving efficiency with its original content production -- without sacrificing quality -- and successfully lean into its new forms of monetization. Keeping subscribers happy with relatively low subscription prices is also a top priority.

Netflix operates in an extraordinarily competitive landscape, and consumers have many choices. Amazon and Apple will put up the biggest fights in the years to come, but Netflix currently dominates based on the number of subscribers and the improving fundamentals of the business.

Acquisition or not, Netflix will remain a great buy for buy-and-hold stock investors. The stock is currently well below its 52-week high of $134 and has gained 5.56% this year, as of market close on Dec. 11.

Catie Hogan has positions in Apple and Warner Bros. Discovery. The Motley Fool has positions in and recommends Amazon, Apple, Netflix, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.