Netflix Stock May Be 15% Undervalued Despite Mixed Q2 Results, Analysis Suggests

Netflix (NASDAQ: NFLX) remains under close watch on Wall Street after reporting mixed second-quarter 2026 earnings and lowering its full-year revenue guidance. While the streaming giant’s latest update raised concerns about growth and transparency, a new analysis suggests the recent sell-off may have created a buying opportunity for long-term investors.

According to an analysis by Simply Wall St, Netflix shares could be approximately 15% undervalued, with an estimated fair value of $82 per share compared to its recent closing price of $70.09.

Why analysts believe Netflix still has upside

The report notes that Netflix has faced a challenging period, with its stock falling more than 23% over the past 90 days and declining over 40% during the last year. Investor sentiment has also been affected by the company’s decision to narrow its 2026 revenue guidance and reduce the frequency of reporting audience engagement metrics.

Despite those concerns, the analysis argues that Netflix’s long-term investment case is increasingly driven by pricing power, advertising revenue, operating margin expansion, and ongoing share buybacks, rather than subscriber growth alone.

The streaming giant continues to expand its content library while focusing on advertising and profitability. (Image via Netflix)

Simply Wall St’s valuation model estimates a fair value of $82, implying the stock may be undervalued if Netflix continues improving cash flow and successfully expands its advertising business.

The report also highlights several risks that could challenge the bullish outlook. Advertising monetization may not grow as expected, while additional subscription price increases could negatively affect viewer engagement and future revenue growth.

Netflix continues to invest heavily in original programming and its advertising-supported tier as it adapts to a more mature streaming market. Whether those initiatives can offset slowing subscriber momentum will likely remain a key focus for investors over the coming quarters.