Netflix (NFLX) reports second quarter 2026 earnings on July 16, a key moment after the stock fell about 42% from last year’s high and 24% in the first half of 2026.

At a share price of $75.59, Netflix is trading well below last year’s high, with a year to date share price decline of 16.9% and a 1 year total shareholder return decline of 41.3%. This signals that sentiment has cooled even as the business tests new growth avenues such as advertising, live events, and potential sports rights.

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Netflix looks like a powerful global streaming business, yet the stock has dropped sharply and now trades far below analyst targets and past highs. How much of that strength is actually reflected in today’s price?

Most Popular Narrative: 7.8% Undervalued

Compared with the last close at $75.59, the most followed narrative for Netflix puts fair value at $82, suggesting modest upside if that view holds.

So the conclusion is clear. Netflix looks like a high-quality, cash-generative business that is trading around fair value rather than at a compelling discount. I do not think the market is missing the durability of the model anymore. What it may still be debating correctly is whether the next phase of growth will show up strongly enough in free cash flow to justify paying materially more from here.

Want to see what sits behind that $82 figure? The narrative leans heavily on steady revenue gains, firm margins and free cash flow compounding driven by pricing and ads.

Result: Fair Value of $82 (UNDERVALUED)

However, the Netflix narrative could be shaken if ad monetisation disappoints, or if new content investments fail to translate into stronger free cash flow over time.

Next Steps

With sentiment on Netflix clearly mixed, do not wait for consensus to form. Instead, check the underlying data, weigh both sides of the story, and then review the full breakdown of the 4 key rewards and 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.