Netflix Stock Soars 33% YTD—Time to Buy or Time to Bail?
Streaming giant Netflix has surged 33% year-to-date—leaving investors torn between FOMO and déjà vu. Is this rally built on fundamentals or just another hype cycle?
The bull case: Subscriber growth beats expectations, ad-tier adoption accelerates, and password-sharing crackdowns keep revenue flowing. Bears whisper 'valuation' and point to looming Disney+ and Amazon Prime content wars.
Wall Street analysts remain split—some see $700 price targets while others warn of 'peak streaming.' Meanwhile, retail traders pile in like it's 2021 meme-stock mania all over again.
Bottom line: Netflix keeps printing money while legacy media struggles. But at these levels? Either you believe in the long-term dominance of streaming...or you're about to learn why 'this time is different' are the four most expensive words in finance.
Image source: Getty Images.
A good start to the year
In the first quarter, top-line growth was slightly slower than 2025, but the benefits of that growth were better. Netflix reported an operating margin of 31.7% versus a margin of 28.1% in 2024, while earnings were $6.61 per diluted share versus earnings of $5.28 in the first quarter of 2024.
Year-over-year growth improved in the second quarter, with a 15.9% increase in total revenue, and operating margin of 34.1% compared to 27.2% in Q2 2024. Earnings for the second quarter increased 47.3% to $7.19 due to a combination of increased net income, and a lower overall share count.
The second half sounds great
Looking into the second half of the year, Netflix provided some upbeat forecasting. Third-quarter results are anticipated to be pretty strong relative to Q3 of 2024. Revenue is anticipated to grow by 17.3% year over year to $11.5 billion, while operating margin is expected to be 17.3% versus 15% the year prior. The real kicker is earnings, which are anticipated to increase 27.2% year over year to $6.87 per diluted share.
In all, Netflix has had solid free cash flow, and seems primed to keep going if its lineup for the second half of the year delivers for users.
Upcoming content
The platform's lineup for the second half of the year kicked off with the highly anticipated (and irreverent) Happy Gilmore 2, and that's just the start. The company is slated to premiere many popular options including Wednesday season 2, Frankenstein, A House of Dynamite from Kathryn Bigelow, and the final season of the extremely popular Stranger Things. This is just to name a few of the upcoming pipeline that is a part of Netflix's continued strategy of attempting to create content for the broadest audience possible.
An example of this is partnering with channels overseas to provide content to a global audience. For example, the company noted in its second quarter shareholder letter that it had partnered with TF1, a popular broadcaster in France, to deliver its content to streamers.
To me, this is essential to outpacing competitors in this ever-popular space, and keep the stock as a good investment. I would argue that it's going to be virtually impossible to avoid the ever-expanding popularity of streaming, and Netflix seems to be holding onto the reins despite mounting pressure from a variety of competitors including,, and others.
Given Netflix's current trend of improving annual net income, I think it is a strong stock to own right now, even after already gaining 33% this year.
