Netflix Rewarded Patient Investors But the Last 12 Months Exposed Two Potential Outcomes

By Alex Sirois Published Jun 9, 1:09PM EDT

Quick Read

NFLX delivered 722% over a decade but cratered 34% in the past year, now trading below its 200-day moving average.
Netflix's ad tier drove 60% of new Q1 sign-ups and is tracking to double to $3B in 2026 revenue.
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Netflix Rewarded Patient Investors But the Last 12 Months Exposed Two Potential Outcomes — © stockcam / iStock Unreleased via Getty Images

From DVD Disruptor to Streaming Incumbent

A decade ago, Netflix (NASDAQ: NFLX | NFLX Price Prediction) was still proving streaming could scale globally. Since then, the company has launched hit originals in dozens of languages, weathered a brutal 50.64% drawdown in 2022 after losing subscribers, then re-accelerated through a password-sharing crackdown, an ad-supported tier, and live events like NFL Christmas Day games and the Canelo vs. Crawford fight that drew 41M+ viewers.

Co-founder Reed Hastings handed the reins to co-CEOs Ted Sarandos and Greg Peters. Netflix tried to buy Warner Bros., walked away, and pocketed a $2.8B termination fee in Q1 2026. Today the business carries 325M+ paid subscribers and is leaning hard into advertising, gaming, and video podcasts.

Your $1,000 Became $8,227, But the Last Year Stung

10-Year Return (June 2016 to June 2026)

Initial Investment: $1,000
Current Value: $8,227
Total Return: 722.7%
Annualized Return: roughly 23%
S&P 500 (same period): a meaningfully smaller multiple over the same span

5-Year Return

Initial Investment: $1,000
Current Value: $1,661
Total Return: 66.11%
Annualized Return: roughly 11%
S&P 500 (same period): a stronger return over the same period

1-Year Return

Initial Investment: $1,000
Current Value: $657
Total Return: -34.28%
S&P 500 (same period): a positive return over the same window

The 10-year picture is glorious, but it required holding through a stretch where shares fell more than half in a single year. The last 12 months have been ugly too, with NFLX down from $125.05 to $82.18 and trading below its 200-day moving average of $100.62. Timing absolutely mattered. Whoever bought the 2022 dip is still smiling.

The Bull and Bear Case From Here

The bull case rests on the ad tier and live events continuing to compound. Advertising hit over $1.5B in 2025 and is on track to roughly double to $3B in 2026, the ad tier drove 60%+ of Q1 26 sign-ups, and management guided 2026 free cash flow to ~$12.5B. A P/E of 31 on a business growing revenue 16% with 32% operating margins is defensible given the growth and margin profile.

The bear case rests on competition from YouTube, TikTok, Disney, and Amazon capping engagement, plus FX and the Brazilian tax dispute hinting at more one-off charges. The failed Warner Bros. deal also means content acceleration depends on internal investment alone.

The setup: the 34% pullback offers a better entry than a year ago, the cash flow story is real, and crowd composite sentiment of 73.34 reflects cautious optimism. The multiple still demands conviction at current levels.

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About the Author Alex Sirois →

Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.

Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.

At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.