The Netflix Identity Crisis
Is the 36% Off Sale a Bargain or a Warning?
You’ve been asking. A lot.
“Why haven’t you bought Netflix yet?”
“It’s down 36% from the high. Isn’t this the dip?”
“Should I buy now or wait?”
Fair questions. Netflix is sitting at $85 today, down from a 52-week high of $134. The company just beat earnings, crossed 325 million subscribers, and is growing revenue at 16%. On paper, this looks like the opportunity everyone’s been waiting for.
Here’s what makes this so confusing:
Look at that divergence. The stock (red line) is down at $84.61 after peaking around $150. Meanwhile:
Revenue (orange) climbed from $20B to $45B. Up relentlessly
Operating income (blue) surged from $2.6B to $13B. 400%+ increase
Free cash flow (green) went from negative to $9B positive
Every fundamental metric is screaming buy. The business has never been stronger. Revenue growth: 14.4% CAGR. Operating income growth: 31.2% CAGR.
So why is the stock trading like it’s 2022 all over again?
That’s the question. And here’s the thing: I’m not buying. Not yet.
Let me show you why, and more importantly, what price would actually get me interested.