Netflix (NFLX -2.06%) has a long history as a binge-worthy investment with market-beating returns thanks to continuous innovation.
Shares of the streaming video giant are up 50% over the past year, and there’s a case to be made that its outlook is as strong as ever. Indeed, that was the message from Chief Financial Officer Spencer Neumann at a recent investor conference when he reiterated that the company is “just getting started.”
Let’s take a look at three reasons to consider buying Netflix stock today.
1. Member momentum
2024 was a transformative year for Netflix, as several of its strategic initiatives proved successful and the company reaccelerated its growth.
In the fourth quarter, it added a record 19 million net paid members, finishing the year with 302 million. More than half of those additions chose the lower-priced ad-supported tier, which starts at $6.99 per month in the U.S. Netflix is leveraging that viewership base to sign lucrative marketing deals, bolstering its monetization beyond its traditional subscriptions.
At the same time, the company has seen a favorable response to higher pricing in its standard and premium plans worldwide, with key international markets like Latin America representing important growth drivers.
The results were impressive. Revenue climbed 16% in 2024, while improved scale and a more diversified operation propelled earnings per share (EPS) 65% higher. And the consensus prediction among Wall Street analysts tracked by Yahoo! Finance is that Netflix will deliver 14% revenue growth this year as EPS climbs 25%.
| Metric | 2024 | 2025 Estimate |
|---|---|---|
| Revenue | $39.0 billion | $44.3 billion |
| Revenue growth (YOY) | 15.6% | 13.7% |
| EPS | $19.83 | $24.80 |
| EPS growth (YOY) | 64.8% | 25.1% |
Data source: Yahoo! Finance. YOY = year over year.
2. Programming catalysts
Perhaps the best reason to invest in Netflix is the strength of its exclusive content. In 2024, the company said it had more No. 1 shows on Nielsen‘s weekly “Streaming Top 10” chart than all other streaming platforms combined, and shows from that list drew nearly three times more viewing hours than those of its closest competitor.
This year, anticipation is building for the final season of Stranger Things and season three of Squid Game — two releases that are likely to help Netflix keep viewers highly engaged. The addition of live programming and sports to its catalog has also been a major development. Netflix dipped its toes into the space last year with the Jake Paul vs. Mike Tyson boxing match that became the most-streamed sporting event ever, as well as its first broadcast of live NFL games with its Christmas Gameday special.
These events, as well as its more recent launch of WWE Raw pro wrestling and The 2025 Screen Actors Guild Awards, signal the next phase of Netflix’s evolution into a broader entertainment powerhouse.
Image source: Getty Images.
3. Compelling valuation
Considering its strong operating and financial outlooks, Netflix’s current valuation appears compelling. The stock is trading at 36 times its consensus 2025 EPS estimate, well below its five-year average P/E ratio of about 47, indicating it may be undervalued. Netflix’s ability to continue generating profitable growth with a more diversified platform could support an even higher premium.
Data by YCharts.
A great option
There’s a lot to like about Netflix, and I’m bullish on the stock. While the company isn’t necessarily immune to a slowdown in the global economy, its new lower-priced ad-supported tier could help keep members glued to their screens while supporting its growth outlook across a changing economic environment.
For investors who believe the company is indeed in the early stages of pursuing its full potential as it expands internationally, and who are undeterred by short-term market swings, Netflix shares are a great option for a diversified portfolio.
Dan Victor has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.