Shares of Netflix (NASDAQ: NFLX) recently closed at approximely $69, putting the streaming giant down 26% in 2026. The slide is part of a longer and more painful 48% decline over the past year or so. Netflix has generated life-changing returns for investors, so it has a strong reputation on Wall Street and hasn't fallen this far very often in the past decade.
But catching falling knives can be a dangerous game. What seems like the ultimate buying opportunity can easily punish overeager buyers. Here's what to make of the company after its latest plunge following its second-quarter earnings report release last week.
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The market saw Netflix as a fast-growing darling for years. However, those days might be over. Netflix's revenue growth is suddenly slowing. Revenue grew by 17.6% in the fourth quarter of 2025, followed by 16.2% in the first quarter of 2026, and 13.4% in the second quarter. Making matters worse, management guided for only 11.7% growth in the current quarter, yet another deceleration. Wall Street tends to emphasize quarterly performance, which is working against Netflix at the moment, to be sure.
That's not always healthy, especially for long-term investors. That said, Netflix's slowing growth is definitely becoming a trend. It's worth considering the competitive landscape Netflix must contend with, which includes video games and social media, not just other streaming services. Unfortunately, it's not yet clear whether this is a blip for Netflix or if the business has peaked. Making that distinction will be even harder due to Netflix's decision to offer less transparency into subscriber and viewership data.
Multiple things can be true. Netflix absolutely deserves a lower valuation if its growth is stalling. At the same time, the market might be taking things too far. Even as parts of the business mature, Netflix could still have a very long runway to monetize its users. The company has delved into live sports over the past few years and is monetizing price-sensitive subscribers through ad-supported memberships.
It's also worth mentioning that Netflix hasn't had very many blockbuster hits recently. That's not ideal, but the next Squid Game or KPop Demon Hunters sensation could suddenly reignite growth at any given moment.
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