Netflix Stock Has Turned $1,000 Into About $654,000 Since Its IPO. It Has Gone Nowhere Since 2021.

Netflix (NASDAQ:NFLX) went public in May 2002, with its initial public offering (IPO) priced at $15 a share. It was a DVD-by-mail business back then, and it lost around $22 million that year.

An investor who put $1,000 in the stock at the IPO price would hold about 9,333 shares now. At around $70 a share as I write, the stake is worth about $654,000 -- compounding at about 30% annually for over 24 years.

The same $1,000 put in the S&P 500 (SNPINDEX:^GSPC) on Netflix's first trading day would be worth about $7,000 now, before dividends.

And the Netflix stake got there even with the stock sitting around 44% under the 52-week high of $124.86, hit last October.

Image source: Netflix.

Three splits, 140 shares

Netflix split its stock 2-for-1 in February 2004, 7-for-1 in July 2015, and 10-for-1 in November 2025. Multiply them together, and every share bought in the IPO is now 140 shares.

At $15 a share, $1,000 bought around 67 shares in 2002. After the three splits, they became about 9,333 shares, worth about $654,000 at $70 each.

Sure, a split just slices a company into more pieces. The gain came from the business itself getting enormously bigger. Netflix's revenue rose from around $153 million in 2002 to $45.2 billion in 2025, a nearly 300-fold increase, or about 28% compounded annually. And the company that lost $22 million in 2002 earned around $11 billion in 2025.

Put another way, the stock's 30% yearly return was backed by a business whose sales climbed almost as fast.

The stake has gone nowhere since 2021

Holding all the way wasn't easy. Within five months of the IPO, the stock had dropped around 65%, bringing the $1,000 stake down to about $350 in October 2002.

The more recent stretch is the one I'd focus most on if I were buying the stock today. The stake was worth around $646,000 at the stock's closing high in November 2021. It dropped to about $155,000 by May 2022, then rose to about $1.25 million at the stock's record close in June 2025. Now, it's back to around where it sat almost five years ago.

The business didn't stall in that time, though. Netflix's net income was $5.1 billion in 2021 and around $11 billion in 2025. With the share price roughly flat, investors now pay less than half as much for every dollar of Netflix's yearly profit as they did in late 2021.

What does Netflix need to do from here?

Netflix can't match the IPO-era return. After all, the company's market value is around $292 billion today, and for a fresh $1,000 to grow 650-fold again, Netflix would need to be worth about $190 trillion.

The realistic route goes through earnings growth instead. Management expects 2026 operating income to climb more than 20%, as revenue grows 13% to 14% (to between $51.0 billion and $51.4 billion) and the operating margin widens to 31.5% from 29.5% in 2025. Advertising should help, with ad revenue expected to roughly double to around $3 billion this year.

Buybacks can boost that on a per-share basis. Netflix's diluted share count dropped around 2% in the year through June, after the company bought back a record $4.7 billion of its stock in the second quarter.

Still, sales growth keeps slowing. Netflix's year-over-year revenue growth rate has decelerated from 17.6% in 2025's fourth quarter to a forecast of around 12% for the third quarter of 2026. That pace is under half the 28% yearly rate that built the first $650,000.

Yes, profits can outgrow sales for a while as margins rise. But over the long haul, earnings usually track revenue, so the growth rate has to level off somewhere in the low double digits.

The stock price calls for around that much. Shares trade at about 18 times Netflix's expected 2027 earnings, based on analysts' consensus estimate -- arguably a modest price for a company expecting its operating income to rise over 20% this year.

What could $1,000 put into Netflix now realistically do? I think it'll probably grow about as fast as the company's earnings, which might mean low double digits a year if the growth rate levels off.

That would be a solid result, even if it looks nothing like the first 24 years. And at around $70 a share, I think Netflix stock is fairly priced for that sort of outcome, not much more.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.