Why Is Netflix Growing Fastest And Falling Furthest?
Netflix (NFLX) grew revenue faster over the past twelve months than Amazon, Apple, Comcast, or Disney and earned a wider operating margin than all of them except Apple. Its shares still finished those twelve months down 38.9%, the last of the five. The fall has not made the stock cheap. That is the mismatch worth explaining.
Did Amazon Really Have A Better Year Than Netflix?
Set the two side by side, and the past twelve months stop reading as a verdict on the business. Netflix turned $48.37 billion of trailing-twelve-month revenue into a 29.7% operating margin, more than twice Amazon’s 12.1%, and it grew faster doing it, 16.0% against 15.8%. Amazon’s shares returned 7.0% over those twelve months. Netflix’s returned -38.9%.
| NFLX | DIS | AMZN | CMCSA | AAPL | |
|---|---|---|---|---|---|
| Market Cap ($ Bil) | 339.5 | 187.7 | 2,718.1 | 87.6 | 4,765.1 |
| PE Ratio | 24.9 | 21.8 | 20.1 | 7.8 | 37.0 |
| LTM Revenue Growth | 16.0% | 4.6% | 15.8% | 0.6% | 14.2% |
| LTM Operating Margin | 29.7% | 15.2% | 12.1% | 14.7% | 33.2% |
| 12M Stock Return | -38.9% | -11.1% | 7.0% | -19.2% | 33.1% |
What the market repriced was the growth rate. Netflix’s Q2 2026 report carried another weaker-than-expected forecast, and the shares fell before the bell the next morning.
At 24.9 times earnings, Netflix is still the second-most expensive stock in this group, dearer than Amazon at 20.1 times and behind only Apple. The fall did not end the argument about the premium.
Is There Anything Left For Netflix To Grow Into?
Management’s answer is that most of the opportunity is still untaken. Its CFO puts Netflix at under 45% penetration of roughly 800 million addressable households worldwide.
Netflix’s live events are expected to take about 5% of the 2026 content budget and deliver 1% of view hours, yet the company credits them with six of the ten biggest new-member sign-up days of the past five years. Management says monthly players for its cloud games have risen elevenfold since it scaled the effort up in October 2025. The ads plan feeds advertising revenue guided to about $3.00 billion in 2026, against a 2026 revenue forecast of about $51.20 billion for the company, and management describes the shortfall in what an ads member is worth as near-term unrealized revenue growth.
What Does Netflix Have To Deliver Next?
Not a repeat of the last twelve months. Its CFO has guided full-year 2026 top-line growth of 13% to 14%. Netflix has stopped asking to be paid for acceleration.
It is asking to be paid for operating leverage instead. Management guides 2026 operating income growth of about 20.0% on that revenue, with content expense forecast up about 10% in 2026. The risk sits a layer below. View hours grew 2% in the first half of 2026, faster than 2025’s 1.5% but nowhere near the pace of revenue. The difference is price increases, more members, and advertising rather than more watching.
Management defends that gap with engagement quality measures whose details it has decided not to publish. A stock 43% below its two-year high of $133.91 is not obviously mispriced in either direction. No single column settles it, and growth, profitability, stability, resilience, and valuation are worth scoring side by side before you pick a winner in this group.
So Do You Buy Netflix After A Fall Like This?
Perhaps, but only if what you are buying is the margin rather than the growth rate. The size of the drop settles nothing. A stock can fall a long way and still be the dearer half of most comparisons you run. Take the group view first: every name in the industry on valuation, growth, profitability, and return at once. A peer group is still one corner of one market. The Trefis High Quality Portfolio runs that comparison across every industry, holding businesses that win on cash generation, margins, and balance-sheet strength wherever they trade. That portfolio has a track record of outpacing the three major indices.