Netflix Stock Is Up 25% From Its 2026 Lows. More Gains for NFLX Could Be in Store.

Netflix (NFLX) stock has rebounded 25% from its 2026 low of $65.08 per share hit in mid-July. However, the stock is still down 34% for the past 52 weeks and trades 36% below its record high of $126.71, which it reached back in September 2025.

Is there more heat left in Netflix's recent rally? Or should investors take some profits off the table? Let's take a closer look.

Why Is Netflix Stock Going Up?

To begin, let’s look at the factors that have helped Netflix recover from its 2026 lows.

First, NFLX stock was ripe for recovery, as its valuation became mouthwatering following the crash after second-quarter 2026 earnings. Incidentally, legendary fund manager Bill Ackman’s Pershing Square Holdings (PSHZF) also took a stake in Netflix in Q2. In his letter, Ackman said that Netflix has “effectively won the streaming wars” and added that he expects revenue to grow in the double digits while “earnings should compound at close to 20% annually” on margin expansion and buybacks.

Reports of Netflix considering opening its platform to host third-party streaming services have also lifted sentiment. This year, Netflix partnered with France's TF1, and started showing TF1's content beginning in June 2026 as part of the deal. This was the first partnership of its kind for Netflix, but it did not rule out more such deals.

During the Q2 2026 earnings call, responding to a question about bundling its service with other streamers, Co-CEO Greg Peters said that such partnerships are good for Netflix's members. “They enhance the variety of our offering. They're also effective for our business,” he emphasized.

Finally, Netflix stock has come back into favor with markets amid the weakness in the artificial intelligence (AI) trade. The euphoria around AI stocks has been among the reasons NFLX stock has underperformed in recent months, particularly as the company is seen as a net AI loser. 

NFLX Stock Forecast

Analyst sentiment toward Netflix is showing signs of a turnaround. While NFLX stock has mostly faced downgrades and downward price target revisions this year, Wolfe Research recently raised its target price from $84 to $95 per share.

Overall, Netflix has a consensus “Moderate Buy” rating on Wall Street. Of the 49 analysts with coverage, 31 have a “Strong Buy” rating and four have a “Moderate Buy" rating, while the remaining 14 analysts offer a “Hold.” Netflix stock has a mean target price of $95.48, which suggests potential upside of 17% from current levels.

Can Netflix Stock Rise Any Higher?

I remain bullish on Netflix stock and expect it to continue its good run and end the year higher from these levels. Netflix has established itself as the preeminent streaming company and has come out shining amid the streaming wars. While the industry’s growth might slow, it should continue to grow as more users pivot from traditional TV to streaming. In my view, concerns over AI and rising competition from YouTube are also a bit stretched, even though they remain threats for Netflix. 

Netflix’s ad business continues to scale, and management has reiterated its forecast of ad revenue doubling to about $3 billion this year. Gradual price hikes, ad revenue growth, and member additions should help Netflix achieve double-digit annualized top-line growth over the next few years with the odd aberration. The company's margin should also continue to expand as it aims to keep content spending growth below revenue growth. Moreover, operating leverage comes into play with rising member count, which would support margin expansion.

Over the long term, Netflix has significant untapped potential from new initiatives like video gaming, which management sees as a $140 billion market. Live events are another area of focus that can help make the platform sticky for users. While live events have much lower proportionate watch time (based on content spend) versus family or kids’ content, management highlighted that they help drive customer acquisition.

NFLX stock trades at a forward price-to-earnings (P/E) multiple of 22.6 times with a P/E-to-growth (PEG) multiple of 1.02 times. I find these multiples reasonable for a quality business like Netflix that has a considerable moat and is the market leader in a growing industry. Overall, I continue to stay invested in Netflix and won't cash out after the recent rally.