Netflix Stock: Should You Buy the Post-Earnings Dip?
2026-10-26 16:52
•David Jagielski, Cpa •The Motley Fool
•• • Axe Cap view
Netflix’s Dip: Patient Buyers Could Profit
Netflix missed big growth expectations but trades at a more attractive valuation, tempting long-term buyers.
Netflix’s latest earnings showed steady revenue and earnings per share, but the guided slowdown in growth spooked the market. The stock has dropped 30% this year, making it cheaper relative to expected profits than many US tech peers. For South African investors, this matters mainly through the USD/ZAR exchange rate—Netflix revenues come in dollars, so a weaker rand raises the local cost but also signals broader dollar strength pressure on growth stocks. Locally, we see no direct JSE equivalent with similar streaming exposure, so rely on a USD/ZAR view. If the rand remains volatile or strengthens, that could blunt Netflix’s US-dollar based gains for local investors. Long-term, 17 times forward earnings is not expensive for a company still growing double digits, but patience will be key as short-term hurdles mount. Watch for how global inflation and consumer spending trends evolve, since those could derail recovery prospects. this is just our opinion and not financial advice
Watch Netflix closely for a possible entry on further dips, especially if USD/ZAR stabilizes below 18. Avoid aggressive buying now given guidance uncertainty and currency risk.
- NFLX
- USD/ZAR
- global consumer spending slows further
- rand weakens sharply against the dollar
5/10
Netflix reported Q3 earnings that met revenue expectations and beat on EPS, but disappointed the market with underwhelming full-year guidance projecting 13% revenue growth. The stock has declined 30% year-to-date and is now trading at a forward P/E of 17, below the S&P 500 average of 19. Despite near-term headwinds around slowing growth, the analyst suggests the stock may be an attractive buy for patient investors given its reduced valuation and double-digit growth fundamentals.
Our take is based on reporting first published by The Motley Fool.