Jim Cramer Calls Netflix “A Buy, Not a Huge Buy” After Shares Fall 35% in a Year
A longtime Netflix shareholder put Jim Cramer on the spot after watching shares lose more than a third of their value, and his answer about whether to hold, add, or sell reveals just how conflicted even the bulls have become.
A longtime Netflix shareholder called into Mad Money last week wondering if Netflix (NASDAQ:NFLX | NFLX Price Prediction) is still the same company he originally bought: “I’ve been a believer in the importance of corporate leadership just like you, and I’ve been very patient,” he said.
However, he added his reasons for concern: “Since February, and what I think was a very poorly managed Paramount offer, and now with Reed Hastings no longer at the helm, I’m starting to wonder if this is really the same company I invested in.“
The caller closed by saying: “Is it time to hold, add, or sell Netflix? What do we do?”
Jim Cramer Cautiously Believes in Netflix
Cramer responed that he’s cautiously bullish on Netflix: “I think that Netflix is a buy, not a huge buy. I mean, I wouldn’t put a lot of money, but I think you can bounce here,” he said.
He then validated the caller’s discomfort with recent sector dealmaking: “In the time, the whole Warner Bros. Discovery delivery, it left me cold, too.” Yet he still has faith in the operators: “I do think these are still the great guys that have built a terrific company.”
Netflix’s Record $4.7 Billion Buyback Meets Slower Cash Flow
Netflix’s Q2 FY2026 earnings report gives investors something to weigh. Revenue of $12.56 billion grew 13.4% year over year, EPS came in at $0.80 against a $0.79 estimate, and operating margin reached 33.4%. Free cash flow, however, fell to $1.53 billion from $2.27 billion a year ago. Netflix repurchased $4.7 billion of stock, its largest quarterly buyback ever, with roughly $27 billion of authorization remaining. Full-year guidance calls for $51.00-$51.40 billion in revenue, a 31.5% operating margin, and roughly $3.00 billion of ad revenue.
The stock reflects the skepticism. Shares closed at $79.84 on August 27, down 34.74% over the past year and 14.85% year to date, though up 10.29% over the past month. Netflix trades at a 26 trailing P/E with 29 Buy and 7 Strong Buy ratings versus 15 Holds.
Key Takeaways
Cramer’s Netflix call is cautiously bullish: he sees potential for a bounce but would limit his position size. Revenue growth and substantial buybacks support the business case, while lower free cash flow and concerns about leadership and dealmaking temper confidence. His answer to an uncertain shareholder is to keep a small position.
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Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.
Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.
He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.
His work has also been featured on platforms including Seeking Alpha and Sure Dividend.
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