Netflix Is Down 46% From Its High. Is This a Once-in-a-Lifetime Buying Opportunity Before the Stock Goes Parabolic?

Netflix (NASDAQ: NFLX) stock closed near $82 last week, which leaves it down about 36% from its 52-week high of $126.71 and roughly 46% below its June 2025 all-time high. I do not think this is a once-in-a-lifetime setup, but it is the cheapest relative to its earning power that Netflix stock has looked in years.

The damage this year has been real. Netflix hit a 52-week low of $65.08 after July earnings, its lowest level since August 2024, and the stock entered that session already down roughly 20% year to date. It has since recovered to the low $80s.

Still, the drawdown from the peak is near 36%, and the 52-week range of $65.08 to $126.71 shows how violent the repricing was. Let's see what this means for investors.

Image source: Getty Images.

Why the money left Netflix

The core issue is deceleration. Revenue growth fell from 17.6% in the fourth quarter of 2025 to 16.2% in the first quarter of 2026 and 13.4% in the second quarter, with third-quarter guidance pointing to just 11.7%. Netflix guided to third-quarter revenue of $12.86 billion, against Wall Street's roughly $13 billion expectation, and EPS of $0.82, versus the $0.85 expected by analysts. The most profitable segment, the United States and Canada, slowed to about 10% growth after a partial-quarter price increase.

Strategy questions piled on. Netflix lost a bidding war for Roku in a deal worth roughly $22 billion and walked away from Warner Bros. Discovery assets earlier in the year. Reed Hastings stepped down from the board, and insiders sold nearly $130 million of shares over three months.

What the company is actually building

Beneath the sentiment, the business is executing on what matters most. The ad-supported tier has surpassed 250 million monthly active viewers, and management reaffirmed that ad revenue will roughly double to $3 billion in 2026. Netflix is expanding programmatic access this summer to capture smaller buyers and leveraging high-demand live inventory, including NFL games and WWE. Live events and games are moving from experiments into recurring programming.

Profitability is holding up. Second-quarter operating margin came in at 33.4% on revenue of $12.56 billion, with net income of $3.40 billion, up from $3.13 billion a year earlier. Full-year guidance is $51.0 billion to $51.4 billion in revenue, with a 31.5% operating margin.

Why capital could rotate back

Management is voting with the balance sheet. Netflix authorized a $25 billion share repurchase program, one of the largest in its history, and bought back about $4.7 billion of stock in the second quarter alone, its biggest quarterly buyback on record. At current prices, that program can retire a meaningful slice of the float.

Valuation is the other piece. The stock has fallen to roughly 19-22 times 2026 earnings estimates, well below the multiples it commanded for most of the past decade. Analysts still model earnings growth averaging 21% to 22% annually over the next three to five years.

Are we going to see a parabolic move?

This is not a once-in-a-lifetime buying opportunity, and I would be skeptical about anyone framing it that way. There will most likely be a bounce-back, but not a parabolic move. Netflix is a maturing business with genuine growth deceleration, and a parabolic move would require ad revenue to overshoot the $3 billion target and engagement to reaccelerate.

Instead, Netflix is a good business trading at a reasonable price for the first time in years. If ad revenue keeps doubling, margins hold near 31.5%, and the $25 billion buyback grinds the share count down, the setup works even with 10%-12% revenue growth rather than 20%. That is a solid long-term position.

Micah Zimmerman has 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.