Overview
Netflix (NFLX) needs no introduction. The subscription-based streaming service known worldwide provides on-demand movies and television to half a billion people in 190 countries. The company was founded in 1997 in Los Gatos, California, as a DVD rental service, and transitioned to streaming in 2007. By 2013, Netflix was producing original content, and by 2023, it had more than 3,600 original titles. Today, it stands as the dominant global streaming platform, leveraging its scale, data-driven content strategy, and expanding monetization channels to drive durable growth and maintain a competitive edge in an increasingly crowded media landscape.
Buy the Dip?
April 16th, Netflix reported its Q1 2026 results. The company posted solid growth, with revenue rising 16% YoY to $12.25 billion. Its EPS was $1.23, and its FCF received a healthy boost from the $2.8 billion termination fee it received from the failed Warner Bros. acquisition in February of this year. However, the most notable aspect of this report was the weak forward guidance for Q2, causing the stock to dip 10% on Friday, April 17th. That said, for a company that continues to grow steadily, one quarter of softer guidance is not a warning sign. The company's core fundamentals are steady. Netflix’s global subscriber count continues to climb, its ad-supported subscription is gaining traction, and 2026 is set to be a great year for original content.
Why-to-Buy
Despite the noise, Netflix is a well-established company with consistent growth and positive earnings, and its long-term trajectory remains firmly upward, with its expanding content ecosystem and pricing power helping sustain margins even as competition intensifies. Supported by consistently strong earnings beats, a growing international footprint, improving monetization through ads and subscriptions, and an overreaction from the market (giving investors an enticing 10% discount), Netflix (NFLX) is CFR’s pick of the week.
