Prediction: Netflix Stock Won't Double by 2031

Netflix (NASDAQ: NFLX) has paused investor gains. Since reaching an all-time high of $133.91 on June 30, 2025, shares have tanked. They currently trade 45% off that peak (as of July 28).

It's easy for investors to become more pessimistic about this business, which is no longer operating in an easy industry backdrop. Therefore, I don't believe this top streaming stock will rise 15% per year to double by 2031. Here's why.

Image source: Netflix.

The company is operating in a different environment

There are several reasons why I think investors should adopt a more muted view of Netflix these days. For starters, revenue growth is slowing. Management expects the top line to increase by 13.3% year over year in 2026. Assuming the company's sales rise at a low-double-digit annualized rate in the coming years, it would mark a notable deceleration from the past.

Engagement is also softening. In Netflix's key market, the U.S., the platform commanded 8% share of total TV viewing time in May. This was 42% behind Alphabet's YouTube, which had a 13.8% share.

Competition has never been so challenging. The streaming video market is crowded, with offerings from deep-pocketed rivals that have their own compelling content. There's also social media and short-form video, which are incredibly popular and leverage the prevalence of mobile devices.

Netflix's cash content spend is expected to total $20 billion in 2026. That would mark a 10% jump from 2025, faster than the 8% compound annual rate in the five years before. Now that the business is directing more of its budget to live events and sports, it's not unreasonable to assume content spending can grow faster than investors expect.

This environment is drastically different from what it was a decade ago. Back then, Netflix was still the only pure-play streaming game in town. And it mostly competed against cable TV networks. The company's user experience, letting consumers pick from a huge selection of series, movies, and documentaries and watch what they wanted, whenever they wanted, was superior to traditional linear TV.

It's time to reset expectations

For what it's worth, the streaming stock's valuation has come down considerably. Netflix shares trade at a price-to-earnings ratio of 23.1. The multiple is now 54% cheaper than it was exactly 12 months ago.

The beaten-down valuation, however, doesn't automatically guarantee a market-beating performance over the next five years. I think investors are coming to terms with the fact that Netflix might be entering a new chapter in its history, one that will present more challenges.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Netflix. The Motley Fool has a disclosure policy.