Can You Make Money Off Netflix Stock Now?
Netflix (NFLX) stock has dropped 12% since mid-September, retreating from a recent high of $80.32. When a familiar company discounts this quickly, investors often look for an entry point before the price rebounds. Yet this selloff has a reason behind it, and Netflix has navigated sharp declines before. So what pushed the stock down, and has buying Netflix after its sharp falls paid before?
Why Did Netflix Stock Fall?
Netflix stock had already slipped from its September 14 high when Wells Fargo analysts downgraded the shares on September 18, and it fell further that day. The analysts warned that weaker engagement and content could pressure margins and valuation.
Internal figures illustrate how slowly viewing is growing. During the July 16 call, management noted that view hours grew 2% in the first half of 2026, compared with 1.5% in 2025. A co-CEO has since acknowledged publicly that the company is not growing as fast as he wants.
Did Netflix Reward Investors Who Bought Earlier Declines?
History suggests the strategy often works, and Netflix offers a substantial sample size to evaluate. Since 2010, the stock has fallen 20% or more within 30 trading days on 16 separate occasions. Today’s fall is smaller: Netflix is 12% below its September 14 high. All but the two drops from 2026 have a full year of subsequent trading data. The shares traded higher twelve months later in 10 of those 14 older occurrences. At the median, a $10,000 investment made on the day of the drop was worth about $14,100 a year later.
Investors stepping in during these selloffs usually faced further losses before seeing a return. At the median, the stock fell another 17% after the initial drop. In 7 of the 16 drops, the shares fell at least a fifth further. The steepest loss followed the August 2011 decline, leaving a buyer down 72% a year later. Even successful trades required patience: the best price over the following year arrived a median of 287 days after the drop, or about nine months.
| Period | Past Median Return |
|---|---|
| 1M | -2.5% |
| 3M | -1.7% |
| 6M | 17.0% |
| 12M | 40.7% |
| 30 Trading-Day Dip | NFLX Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | NFLX | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | 41% | 53% | -17% | 287 | ||||
| 5/29/2026 | -20% | 8% | -22% | 0 | ||||
| 1/2/2026 | -20% | 4% | -26% | 104 | ||||
| 10/17/2023 | -21% | -3% | 93% | 105% | -3% | 359 | ||
| 4/20/2022 | -34% | 7% | 45% | 63% | -26% | 280 | ||
| 1/21/2022 | -37% | -6% | -8% | 15% | -58% | 11 | ||
| 8/14/2019 | -20% | -4% | 61% | 83% | -15% | 331 | ||
| 10/30/2018 | -22% | -8% | 1% | 35% | -18% | 185 | ||
| 8/17/2018 | -22% | 4% | -6% | 22% | -26% | 259 | ||
| 1/22/2016 | -21% | -7% | 36% | 38% | -18% | 364 | ||
| 9/23/2015 | -20% | -7% | -2% | 34% | -16% | 72 | ||
| 10/16/2014 | -23% | -7% | 92% | 145% | -13% | 294 | ||
| 4/4/2014 | -22% | 2% | 26% | 44% | -7% | 159 | ||
| 8/1/2012 | -22% | 1% | 366% | 392% | -1% | 350 | ||
| 4/27/2012 | -24% | 0% | 154% | 159% | -36% | 361 | ||
| 8/17/2011 | -20% | -11% | -72% | 2% | -77% | 13 | ||
| 7/29/2010 | -21% | -1% | 172% | 205% | 0% | 349 | ||
Netflix Earns Well, But Its Sales Gains Are Shrinking
Over the past twelve months, Netflix kept 29.7% of its sales as operating profit, compared with 18.5% for the S&P 500. The company also converted 87.7% of its net income into operating cash, roughly matching the 88.5% rate from a year earlier. Investors are not currently paying a premium for this profitability. The stock trades at 21.7 times earnings, sitting just below the 21.9 multiple for the index.
Growth is the complication. Revenue grew 13.4% in the latest quarter from a year earlier, decelerating from 16.2% the quarter before. Management has forecast 12% for the third quarter of 2026. The company said it expected that growth to come from more memberships, pricing and higher ads revenue. Netflix is expected to report the quarter on or around October 20, 2026.
Buyers of historical Netflix selloffs usually made money, provided they could absorb a further fall and hold the position for most of a year. The company navigating the current drop remains highly profitable and priced similarly to the market on earnings, yet its viewing is expanding slowly and its sales growth continues to decelerate. Taking a position today effectively requires betting that the slowdown in sales growth will stabilize. Revenue growth remains the number to watch in that third-quarter report.
Does This Mean You Should Act On NFLX?
Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.
There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.