Netflix (NFLX +3.07%) stock used to be one of the coolest growth stocks on the block. It was a part of the famed FANG stocks (Facebook (now Meta Platforms), Amazon, Netflix, and Google (now Alphabet)), which expanded into FAANG when investors wanted to include Apple.
Netflix got edged out of the Magnificent Seven stocks club after investors gravitated toward new favorites, but it has kept up with the S&P 500 over the past five years. A good first-quarter earnings result and a 28 P/E ratio suggest that upside is possible, but a deeper look will confirm if this forgotten FAANG stock is worth remembering.
Image source: Getty Images.
Netflix has silently maintained consistent revenue growth
Netflix’s numbers aren’t flashy, but they show a steady trend in the right direction. The streaming giant has achieved a 12.6% annualized revenue growth rate over the past five years, along with a 12.7% CAGR over the past three years.
That long-term growth accompanies revenue acceleration. Netflix delivered 16% revenue growth in full-year 2025, driven by new ventures in live events, gaming, and video podcasts. The company beat its Q1 guidance, delivering 16% year-over-year revenue growth.
Netflix is still able to raise prices and retain customers. The latest price hike took place in March, and it offers immediate revenue growth, which will be reflected in Q2. Netflix also released a gaming app for kids in April, which is an ad-free mobile experience designed to retain users.
Today’s Change
(3.07%) $2.67
Current Price
$89.69
Key Data Points
Market Cap
$366B
Day’s Range
$86.36 – $89.81
52wk Range
$75.01 – $134.12
Volume
1.3M
Avg Vol
44M
Gross Margin
49.44%
Netflix is investing more money in AI
Artificial intelligence has disrupted the filming industry, and Netflix’s Q1 shareholder letter shows that it is leaning into this technology. The streaming service provider acquired filmmaking tech company InterPositive in March to give creators AI-powered tools that make it easier to produce movies.
It’s not the only AI investment Netflix made. The company started using AI effects to cut costs last year. Netflix Co-CEO Ted Sarandos said AI helped the production team save money and complete their work faster. Netflix also cited generative AI as a “significant opportunity” last year.
Netflix’s net profit margins climbed higher in 2025 and hovered in the mid-20% range. It had a major growth spurt in Q1, fueled by a $2.8 billion merger termination fee after the Warner Bros Discovery acquisition deal didn’t go through. It’s a one-off event that gives Netflix more capital to reinvest in its business. The end result was net income soaring by 83% year over year.
Continued investments in AI can make it easier for Netflix to achieve sustained net profit margin growth. Top-line growth has been robust for several years. Cost-cutting, combined with price hikes and online ads, can help Netflix stock regain momentum and make people wish they hadn’t forgotten about it.
Marc Guberti has positions in Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Netflix, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
