Is Netflix Stock Underperforming the S&P 500?

Headquartered in Los Gatos, California, Netflix, Inc. (NFLX) is a global entertainment company and one of the world’s leading streaming platforms, offering TV series, films, live programming and games across a broad range of genres and languages. Its core business is subscription-based streaming, with revenue primarily generated from monthly membership fees, while its newer advertising business provides an additional monetization channel.

With a market cap of approximately $340.3 billion, Netflix sits firmly in the 200-billion-or-more mega-cap tier, giving the streaming giant substantial financial firepower. That scale provides the flexibility to invest aggressively across its next growth avenues, from scaling its advertising business and expanding into gaming to strengthening its technology infrastructure and growing its in-house content studio, while continuing to fund its core streaming operation.

NFLX stock now trades 35.5% below its 52-week high of $126.71. Over the past three months, the stock has slipped 5.4%, notably outperforming the S&P 500 Index ($SPX), which has rallied 2%. 

The longer-term performance paints an even more challenging picture. NFLX has plunged 33.6% over the past 52 weeks, sharply trailing the S&P 500’s 18.6% gain. The gap has persisted into 2026, with Netflix down 12.8% YTD compared with a 12.7% advance for the index, underscoring that the weakness is more than a short-term setback. 

From a technical perspective, Netflix shares have remained below their 200-day moving average since mid-April, signaling a prolonged downtrend. However, the stock has recently reclaimed its 50-day moving average, offering an early indication that near-term momentum may be improving.

NFLX has climbed 25% from its mid-July 2026 low of $65.08, as a more attractive valuation, renewed institutional interest, including a new stake from Bill Ackman’s Pershing Square, and optimism around potential third-party content partnerships have helped restore investor confidence. The stock has also benefited from a rotation away from the crowded AI trade, which had weighed on Netflix earlier in the year. Additionally, the improving sentiment, strategic growth opportunities and a sharp recovery from the lows point to strengthening near-term momentum and suggest the recent rally could have further room to run.

To put Netflix’s performance into perspective, shares of its rival, Paramount Skydance Corporation (PSKY), have declined 25.9% over the past 52 weeks and are down 18.8% on a YTD basis. 

Despite the stretch of underperformance, Wall Street has not stepped back. Among 49 analysts covering the stock, the overall rating stands at “Moderate Buy.” Its mean price target of $95.52 implies an upswing potential of 16.9% from the current market.