Netflix, Inc. (NFLX): A Bull Case Theory

We came across a bullish thesis on Netflix, Inc. on Rijnberk InvestInsights’s Substack by Daan |InvestInsights. In this article, we will summarize the bulls’ thesis on NFLX. Netflix, Inc.'s share was trading at $109.13 as of December 1st. NFLX’s trailing and forward P/E were 45.58 and 34.25 respectively according to Yahoo Finance.

Netflix’s 10% post-earnings sell-off underscores how emotional and short-sighted markets can be. The decline followed a headline miss that masked strong fundamentals and a one-off tax charge in Brazil, which reduced operating margins by five points but had no recurring impact. Excluding this, Netflix’s Q3 was robust, with 17% revenue growth—the best in over a year—driven by subscription gains, pricing power, and rapid ad revenue expansion.

Management expects ad sales to double in 2025, reinforcing long-term growth momentum. Streaming engagement and global market share also advanced, confirming Netflix’s leadership and expanding moat, further strengthened by its unique mix of original and licensed content. The quarter’s margin shortfall reflected regulatory noise, not operational weakness, as free cash flow reached $2.7 billion and annualized FCF $9 billion, supporting ongoing buybacks and a healthy balance sheet. Looking ahead, management guided for 16% FY25 revenue growth, a 29% operating margin, and raised FCF guidance to $9 billion—solid metrics that make the sell-off appear unwarranted.

Beyond near-term numbers, Netflix’s push into live sports presents a transformative growth avenue. Its financial strength, global scale, and advertising capabilities make it uniquely positioned to secure selective sports rights and expand its TAM. With double-digit revenue growth, margin recovery potential, and projected EPS CAGR above 20% through 2028, Netflix remains a premier global media platform. At 43x forward earnings, shares aren’t cheap but reflect justified quality. The recent pullback offers an attractive entry for long-term investors seeking durable growth and expanding cash generation.

Previously we covered bullish theses on Netflix, Inc. (NFLX) by Margin of Sanity and Daan Rijnberk (InvestInsights) in  May 2025, which highlighted its undervalued content library, strong cash flow, pricing power, and expanding ad business. The company’s stock has depreciated approximately by 4.60% since our coverage. The thesis still stands as Netflix maintains robust fundamentals, a growing moat, and long-term growth potential.

Netflix, Inc. is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 133 hedge fund portfolios held NFLX at the end of the second quarter which was 150 in the previous quarter. While we acknowledge the potential of NFLX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.