I keep buying Netflix (NASDAQ:NFLX | NFLX Price Prediction) every time the market hands me a worse price for the same business, and the market has been generous lately. The stock closed at $81.27 on June 11, down 13.32% year to date while the Nasdaq 100 ETF is up 16.74% over the same window. That gap is the whole reason I am writing this. Wall Street is drifting away from a digital monopoly that prints cash, and I am using the drift to load up.
What Keeps Pulling Me Back
The simple version: Netflix sells a habit to over 325 million paid subscribers and has finally turned that habit into an advertising business. Co-CEOs Ted Sarandos and Greg Peters are running a company where the ad-supported tier was over 60% of all Q1 sign-ups in ad markets and the advertiser count grew 70% year-over-year to over 4,000 clients. Ad revenue is guided to roughly $3 billion in 2026, double the prior year. That is a second engine bolted onto an already profitable streamer.
The Data That Closes the Argument
First, the cash. Q1 2026 free cash flow hit $5.09 billion, up 91.44% year-over-year, and management raised full-year FCF guidance to about $12.5 billion. Operating margin is guided to 31.5%, up from 29.5% in 2025. Cash on the balance sheet sits at $12.26 billion, debt-to-equity is 0.54, and interest coverage runs 17.16x. This is an investment-grade money machine.
Second, the moat. Netflix penetration is still less than 45% of total addressable broadband households globally, and growth is showing up everywhere: Q1 revenue rose 14% in North America, 17% in EMEA, 19% in Latin America, and 20% in Asia Pacific. The content engine is producing the kind of cultural events that make churn unthinkable: KPop Demon Hunters drew 325 million views, Wednesday Season 2 pulled 114 million, and the World Baseball Classic delivered the largest sign-up day ever in Japan.
Third, the valuation reset. Trailing P/E sits at 26 with a forward P/E of 25. Return on equity is 48.5%. Netflix repurchased 13.5 million shares for $1.3 billion in Q1 with $6.8 billion left on the authorization. Buybacks at a year-low price are exactly what a long-term owner wants.
The Risk I Will Not Wave Away
Competition is real. Netflix lists Alphabet, Amazon, Apple, Comcast, Disney, Meta, Roblox, TikTok, and local media among rivals, and content amortization growth is front-half-weighted in 2026, which can pressure near-term margins. Walking away from the Warner Bros. deal also limits content acceleration potential. None of that breaks the thesis. Netflix collected a $2.8 billion termination fee for walking, kept its balance sheet pristine, and the engagement data says viewers are still picking Netflix when they sit down at night.
Why the Buy Button Stays Active
Analyst coverage tells me I am not alone: 37 buy or strong-buy ratings against zero sells, with a mean target of $114.56. The crowd on Polymarket sees a 78% probability of NFLX touching $80 in June, which is where I keep getting filled. I own a global subscription business with a doubling ad engine, a 31.5% operating margin target, and a buyback running at a discount. I will keep clicking buy until the price stops cooperating.
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