Things haven’t been pretty for Netflix (NFLX) investors this year. The stock is down over 28% this year and is trading near its 52-week lows. Based on last week’s closing price, NFLX trades at exactly half of its all-time high of $134.12 that it hit in June last year. Meanwhile, at least one Wall Street analyst believes the stock can reclaim that level over the next year. In this article, we’ll examine Netflix's 2027 forecast and analyze whether it can really double in 2027.
What’s Driving Down NFLX Stock?
To begin with, let’s examine what’s been driving down Netflix stock. Shares have looked weak for most of this year, barring perhaps when it walked out of the deal to acquire Warner Bros. Discovery’s (WBD) assets in February, or later when legendary investor Bill Ackman disclosed a stake in August.
The recent round of weakness began after Netflix’s Q2 2026 earnings in July, when, for yet another time, it spooked markets by not raising its annual guidance despite the earnings beat. Netflix's engagement numbers also fell, further adding to the gloom. It did not help that the company said it would reduce the frequency of its “What We Watched” report from biannual to annual.
Nielsen's July Gauge report released last month raised further concerns about Netflix’s engagement numbers. Netflix's share of U.S. TV time fell to a multi-year low of 7.8% while YouTube extended its lead with the Alphabet-owned (GOOG)(GOOGL) unit's share rising to a multi-year high of 14.2%.
Slowdown fears gained further traction when Netflix co-CEO Ted Sarandos warned of a slowdown while speaking at Bloomberg's Screentime conference in Los Angeles last week. “Overall, we’re not growing as fast as I want us to, and we’re working on making that move faster. We are, though, also doing things that create a lot of headwind to that number,” said Sarandos. While he clarified that “the business is great and growing fine,” the damage was done.
NFLX Faced Two Downgrades in September
Amid concerns over falling engagement numbers and rising competition from YouTube, two analysts downgraded Netflix last month. HSBC downgraded NFLX from a “Buy” to “Hold,” with analyst Mohammed Khallouf slashing the target price from $96 to $76. Wells Fargo analyst Steven Cahall downgraded NFLX from a “Neutral” to “Underweight,” cutting his target price to a Street-low of $57.
Meanwhile, not all sell-side analysts have given up on Netflix, and Deutsche Bank analyst Bryan Kraft upgraded the stock from a “Hold” to “Buy” even though he cut his target price by $5 to $95. BMO Capital Markets analyst Brian Pitz also reiterated NFLX's “Outperform” rating and $135 target price. We usually don’t see such variance in target prices for larger companies — barring Tesla (TSLA), in whose case there's huge dispersion in analyst forecasts. In Netflix's case, an analyst is predicting the stock doubling over the next year while a peer sees another 15% downside. The mean target price sits at $94.48, which is nearly 41% higher than current levels.
How to Play Netflix Stock?
My views align with HBSC's, as I also saw Netflix's valuation stretched near its peak last year, when it traded at price-to-earnings (P/E) multiples of over 40x. However, given the massive drawdown since the peak and the continued earnings growth, Netflix’s valuation has fallen sharply, and the stock trades at 17.5x its expected 2027 earnings per share. Those are attractive numbers for a quality name like Netflix, which is expected to deliver double-digit earnings growth for the foreseeable future.
Unless you are of the view that a flurry of users would cancel their Netflix subscriptions and instead shift to YouTube lock, stock, and barrel, Netflix offers good value at these prices. I believe markets are getting a bit too worried about the engagement numbers and Netflix losing TV market share in the U.S. while overlooking several growth drivers. These include strong growth in international markets, live sports, video gaming, and rapid expansion in ad revenues. While YouTube has its own advantage, particularly with short-form content, and I have long argued that is an underappreciated asset in Alphabet's portfolio, Netflix has its own moat with a diverse library of global content that user-generated content on YouTube cannot match.
All said, while Netflix might not double over the next year as BMO is predicting, I would vouch for it hitting $100 sometime next year.
On the date of publication, Mohit Oberoi had a position in: GOOG , NFLX , TSLA . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.