Netflix stock is down 40% since April. Is it the next Meta?

Netflix stock fell 5.3% to $65.04 on Wednesday, its lowest close since August 2024, after the company reported its third straight quarter of slower revenue growth. The shares are down 40% since 16 April and 51% below their record close of June 2025, after adjusting for last year’s stock split.

The business itself is not shrinking. Revenue rose 12% on a year to $12.9bn in the third quarter, and the operating margin widened to 34.6% from 28.2%, Netflix’s letter to shareholders shows. That gap between a falling share price and a profitable, growing company raises the question every fallen tech stock invites: is Netflix stock now the undervalued growth story Meta was at its low in 2022?

Why Netflix stock fell

Growth is slowing, and the market prices Netflix on growth. Revenue rose 17.6% on a year in the last quarter of 2025, then 16.2%, 13.4% and now 11.8%. Netflix expects about 12% in the fourth quarter. It also cut its forecast for advertising revenue this year to about $2.7bn, from about $3bn, blaming a slower rollout of some ad tools.

The letter also addressed viewing. “We know there’s some investor concern about our view hours growth,” it said, adding that the company wants to speed up growth in hours watched. Last week Netflix cut about 1,000 jobs, about 6% of its staff, and named the former Disney executive Peter Rice to replace Bela Bajaria as chief content officer, the Associated Press reported. Netflix also lost the contest for Warner Bros. Discovery, which Paramount completed this month.

How cheap Netflix stock is now

At Wednesday’s close, Netflix is worth about $273bn, on its diluted share count of 4.2bn. For 2026 it forecasts revenue of $51.1bn at a 31.5% operating margin, which implies about $16.1bn of operating profit, so the company trades at about 17 times this year’s operating profit, on our numbers. Operating profit is still growing by more than 20% this year, the company says. Tech valuations in general have come down this autumn, as we wrote on Tuesday.

Netflix is also buying back its own shares, in its biggest quarter of buybacks ever: 63.9m shares for $4.8bn in the third quarter, with $22.3bn of authorisation left. It ended September with gross debt of $15.3bn and $8.2bn in cash.

What Meta looked like at its low

Meta’s fall in 2022 was far deeper, and its business was in worse shape. Its shares fell from $338.54 at the start of 2022 to $88.91 on 3 November 2022, a drop of 74%, Nasdaq’s prices show. In the quarter before that low, Meta’s revenue fell 4% on a year and its operating profit fell 46%, as its operating margin dropped to 20% from 36%, its results show. Spending on the metaverse was rising while revenue fell.

Then Meta changed course. It laid off about 11,000 staff in November 2022 and called 2023 its “Year of Efficiency”, its full-year results said. Revenue returned to growth and the shares followed. At $697.52 on Wednesday, Meta’s stock is 7.8 times its 2022 low.

Is Netflix the next Meta?

The comparison cuts both ways. In Netflix’s favour, it is starting from a stronger place than Meta did: its revenue is growing, not falling, and its margins are rising, not halving. A rebound does not need a rescue, only a return to faster growth. Netflix also has some levers. Its advertising tier will reach 15 more countries in 2027, starting in March, and it already shows live sport such as NFL games.

Against it, Meta’s recovery came from cutting heavy costs and from growth returning in a huge advertising market. Netflix has already done much of its cost work, with its margin near 35%, and its core subscription market is more mature. A share price that has halved can still fall if growth slips towards single digits.

Our view: on today’s numbers, Netflix looks closer to a profitable company priced for slow growth than to a broken one priced for decline. That is a better starting point than Meta had. The re-rating will depend on whether the new content team and the advertising push lift growth back towards the mid-teens.

What to watch

• Fourth-quarter results in January. Netflix forecasts revenue of $13.4bn, up 12%, and a 26.0% operating margin after layoff costs.
• The 2027 forecast. The first full-year guidance from the new team will show whether growth is expected to pick up.
• Viewing. Any figures on hours watched, which the company itself says investors worry about.
• Ad revenue. Whether the $2.7bn forecast for 2026 holds.