Will You Be Comfortable Buying Netflix Stock?
Already own the stock or planning to buy? You might want to re-consider based on the valuation as the stock still looks expensive. Consider the following data:
- Size: A $512 Bil company with $42 Bil in revenue currently trading at $1,203.50.
- Fundamentals: Last 12 month revenue growth of 14.8% and operating margin of 29.5%.
- Liquidity: Has Debt to Equity ratio of 0.03 and Cash to Assets ratio of 0.16
- Valuation: Currently trading at P/E multiple of 49.9 and P/EBIT multiple of 41.1
- Has returned (median) 45% within a year following sharp dips since 2010. See NFLX Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for NFLX, see Buy or Sell NFLX Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and NFLX drops another 20-30% to $842.45 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Netflix (NFLX) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock saw an impact slightly worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: NFLX provides TV series, documentaries, films, and mobile games in multiple genres and languages to over 222 million paid members across 190 countries.
2022 Inflation Shock
- NFLX stock fell 75.9% from a high of $691.69 on 17 November 2021 to $166.37 on 11 May 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 20 August 2024
- Since then, the stock increased to a high of $1,339.13 on 30 June 2025 , and currently trades at $1,203.50
| NFLX | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -75.9% | -25.4% |
| Time to Full Recovery | 832 days | 464 days |
2020 Covid Pandemic
- NFLX stock fell 22.9% from a high of $387.78 on 18 February 2020 to $298.84 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 13 April 2020
| NFLX | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -22.9% | -33.9% |
| Time to Full Recovery | 28 days | 148 days |
2018 Correction
- NFLX stock fell 44.2% from a high of $418.97 on 9 July 2018 to $233.88 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 15 April 2020
| NFLX | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -44.2% | -19.8% |
| Time to Full Recovery | 478 days | 120 days |
2008 Global Financial Crisis
- NFLX stock fell 55.9% from a high of $5.81 on 17 April 2008 to $2.56 on 27 October 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 17 March 2009
| NFLX | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -55.9% | -56.8% |
| Time to Full Recovery | 141 days | 1480 days |
Worried that NFLX could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.