Netflix stock continued its strong sell-off, reaching its lowest level since August 2024. It has now plunged by over 54% from its all-time high. This sell-off accelerated after the company published its earnings report earlier this month. Still, Morningstar analysts believe that it can surge by 30% to $80.
Morningstar makes the case for Netflix stock
Analysts at Morningstar believe that Netflix stock has more upside in the near term. They pointed to several catalysts, including the upcoming launch of its ad-supported tier in 15 international markets. They expect that these launches will drive more user growth, which happened in the markets it had already entered.
The analysts also noted that the company’s churn has continued to improve in the US and internationally. Also, the company will benefit from price increases. The report said:
“We maintain our $80 fair value estimate and narrow moat. A growth slowdown was inevitable, but Netflix remains far superior to its subscription streaming peers, and its valuation multiples are now very reasonable.”
In terms of valuation, most metrics show that Netflix has become a bargain. It trades with a forward price-to-earnings ratio of 17, lower than the S&P 500 Index’s average of 19. This multiple is also much lower than the five-year average of 34.
The same is happening with the forward price-to-earnings-to-growth ratio of 0.84, lower than the sector median of 1.15. It has also remained below the five-year average of 1.37.
READ MORE: Netflix stock analysis: bearish technicals, options point to big moves after earnings
Netflix is facing some major risks
Still, while Morningstar analysts are bullish, others remain relatively cautious. Philip Securities slashed its rating from a strong buy to moderate buy. Also, Argus slashed the target price from $120 to $95, while Citigroup cut the target from $100 to $85.
Deutsche Bank analysts target $93, while Piper Sandler cut the target from $85 to $78. As a result, the average target among analysts is $89, down from $134 12 months ago.
Another risk is that the company’s revenue growth has continued to slow. It made $13.4 billion in the third quarter, up by 11.5%. For the year, analysts expect the company’s annual revenue will grow by 13% to $51 billion, followed by a 10% growth to $56.6 billion.
The main risk is whether the company can continue adding new customers over time. Besides, industry has become highly saturated with companies like Disney and Skydance.
Netflix stock technical analysis
NFLX stock chart | Source: TradingView
The weekly chart shows that the NFLX stock price has been in a strong sell-off this year. It has plunged from $133.9 in 2025 to the current $61.8.
The stock recently moved below the key support level of $64.8, its lowest level in July, invalidating the double-bottom pattern. Also, it is about to form a death cross pattern as the 50-week and 200-week moving averages neared their crossover.
Therefore, the path of the least resistance for the stock is downwards, with the next key target to watch being at $50.
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