Netflix Stock Just Notched a New All-Time High. Is This a Brilliant "Recession-Proof" Stock Pick?

Source The Motley Fool

While most of the tech sector is off its all-time highs by 20% or so, Netflix (NASDAQ: NFLX) recently notched a new all-time high. Most of the market fears how trade wars and tariffs could affect the economy, but Netflix seems immune to those fears.

One conclusion could explain Netflix stock's resilience: The market seems to think it's recession-proof. So, is this the case? And if it is, does the stock have more room to run? Let's take a look.

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 »

Netflix is a service that's unlikely to be cut during a recession

Netflix isn't a company that needs an introduction. Nearly everyone (or seemingly everyone) has a Netflix account or has access to one, although the latter has become a bit rarer due to the password sharing crackdown. Even if a person doesn't have access to it at the moment, it's a subscription service that many people come back to once a new show arrives or a hit series debuts.

Even though Netflix hiked its prices, it still offers great value for its content. You can get access to thousands of titles every month for less than the price of a family dinner. That's a pretty compelling offer, and it could make Netflix a resilient company if consumers' resources start to get stretched thin.

This could give it the "recession-proof" moniker, which is a title rarely bestowed upon companies.

But after it recently notched a new all-time high, is now the time to buy some shares?

Netflix's stock trades at a premium valuation

Netflix's market cap is around $481 billion. However, according to co-CEO Ted Sarandos, Netflix's internal goal is to reach a $1 trillion valuation by 2030. That would indicate the stock will double in under six years, which would make it well worth owning. But is that realistic?

It should be noted that Sarandos also set the goal of the company's revenue doubling by 2030, so at least some financial results are tied to the valuation. Otherwise, it would just be a baseless prediction.

The problem is that Netflix already has an ultra-premium valuation that could hinder this goal.

After its most recent all-time high, Netflix trades for a pricey 52.5 times earnings and 43 times forward earnings.

NFLX PE Ratio Chart

NFLX PE Ratio data by YCharts. PE = price-to-earnings.

While some of Netflix's big tech peers used to have valuations like that, most sold off due to economic fears. Additionally, those same companies are expected to grow similarly to or faster than Netflix's pace over the next few years.

Here's how Netflix stacks up to some of those companies:

Company Forward P/E Ratio 2025 Projected Revenue Growth 2026 Projected Revenue Growth
Netflix 43.3 14% 12%
Nvidia 24.6 54% 23%
Alphabet
16.9 11% 11%
Meta Platforms 22.2 13% 13%

Data source: YCharts and Yahoo! Finance. Note: Projected revenue growth is from Wall Street analysts. Nvidia's projections are for FY 2026 and FY 2027.

Although it's expected to grow similarly to Alphabet and Meta Platforms, its stock has around double the premium these two do. Even a high-growth competitor like Nvidia is valued at far less than Netflix, which leads me to assume that there's a ton of growth already baked into Netflix's stock price.

At 43 times forward earnings, Netflix's stock is just too expensive to make a solid profit. While it may succeed in the coming years, the values that other stocks provide are far greater. As a result, investors should consider scooping up shares of some of Netflix's big tech peers while they're on sale, rather than buying Netflix itself. The time has come and gone to buy Netflix shares; it's time to look elsewhere.

Should you invest $1,000 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 $610,327!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $667,581!*

Now, it’s worth noting Stock Advisor’s total average return is 882% — a market-crushing outperformance compared to 161% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Netflix, and Nvidia. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
WTI slides back closer to mid-$58.00s; bearish potential seems intactWest Texas Intermediate (WTI) US Crude Oil prices struggles to capitalize on its modest intraday move up and drops to a fresh daily low, close to mid-$58.00s during the first half of the European session on Friday.
Author  FXStreet
14 hours ago
West Texas Intermediate (WTI) US Crude Oil prices struggles to capitalize on its modest intraday move up and drops to a fresh daily low, close to mid-$58.00s during the first half of the European session on Friday.
placeholder
Could XRP ETF Approval Be Near? Ripple To Meet SEC Chair Paul Atkins On May 2As positive shifts in cryptocurrency regulation unfold under President Donald Trump’s second administration, speculation is mounting regarding the potential approval of spot XRP ETF applications. 
Author  Bitcoinist
14 hours ago
As positive shifts in cryptocurrency regulation unfold under President Donald Trump’s second administration, speculation is mounting regarding the potential approval of spot XRP ETF applications. 
placeholder
Gold looks set for weekly loss as news of trade talks curb haven demandGold (XAU/USD) trades around $3,250 on Friday,  recovering slightly from two-week lows after three straight days of losses. The losing streak that took place this week was the sum of a whole package of headlines that all had one theme in common: easing on tariffs. 
Author  FXStreet
14 hours ago
Gold (XAU/USD) trades around $3,250 on Friday,  recovering slightly from two-week lows after three straight days of losses. The losing streak that took place this week was the sum of a whole package of headlines that all had one theme in common: easing on tariffs. 
placeholder
Ripple Price Prediction: XRP signals breakout as spot ETF prospects brightenRipple (XRP) price remains firmly supported at $2.20, while trading at $2.22 at the time of writing on Friday.
Author  FXStreet
14 hours ago
Ripple (XRP) price remains firmly supported at $2.20, while trading at $2.22 at the time of writing on Friday.
placeholder
Bitcoin HODLer Selling Expected Around This Level, Report SaysThe on-chain analytics firm Glassnode has revealed in a report how sell-side pressure may see an uptick from Bitcoin long-term holders around this price level.
Author  NewsBTC
14 hours ago
The on-chain analytics firm Glassnode has revealed in a report how sell-side pressure may see an uptick from Bitcoin long-term holders around this price level.
goTop
quote