Netflix Membership Momentum Builds: Is Growth Reaccelerating?

Netflix's NFLX global streaming platform spans across 190+ countries, with its membership model anchoring the business. Flexible subscription tiers, ranging from ad-supported plans to premium offerings, allow the company to address varied consumer budgets while sustaining recurring revenue. Netflix surpassed the 325 million paid memberships milestone during the fourth quarter of 2025. With penetration below 10% of total television viewing time across major markets, substantial room for membership expansion.

Membership dynamics show signs of reacceleration as engagement strengthens. Branded original content viewership increased 9% in the second half of 2025, while total viewing hours increased 2% annually. The ad-supported membership tier is driving incremental growth by providing an affordable entry point for price-sensitive consumers, expanding Netflix's addressable market beyond premium subscribers. This lower-priced option attracts members who might otherwise not subscribe at higher price points.

Netflix's 2026 content strategy targets sustained membership growth through returning franchises like Bridgerton Season 4, One Piece Season 2 and The Night Agent Season 3, alongside new productions, including Pride & Prejudice and Greta Gerwig's Narnia. The platform is diversifying beyond core entertainment into video podcasts through partnerships with Spotify/The Ringer and iHeartMedia, while expanding live programming with events like the World Baseball Classic in Japan. Enhanced licensing partnerships with Sony, Universal and Paramount broaden content variety across genres, driving engagement.

However, sustaining membership reacceleration faces headwinds from intensifying streaming competition, consumer spending pressures and content cost inflation. Netflix projects 2026 revenue of $50.7 billion to $51.7 billion, indicating 12-14% year-over-year growth driven by membership additions. Whether membership momentum continues building and growth truly accelerates will depend on ad-supported tier adoption rates, content slate performance and pricing strategy execution throughout the year ahead.

Netflix’s Competitive Landscape

Netflix faces competition in acquiring members from Disney DIS and Amazon AMZN as streaming platforms pursue different membership growth strategies. 

Disney uses Disney+ to capture family-oriented subscribers through franchise content from Marvel, Pixar and Star Wars, while Disney offers bundle discounts with Hulu and ESPN+ to reduce churn. Netflix targets a broader demographic through global content diversification and flexible ad-supported pricing, aiming to attract price-sensitive consumers.

Amazon leverages Prime Video as part of the Prime ecosystem, bundling streaming access with e-commerce benefits to drive overall Prime membership. Amazon integrates video within its retail platform rather than pursuing standalone streaming subscriptions like Netflix.

NFLX’s Price Performance, Valuation & Estimates

Shares of Netflix have declined 28.3% in the past six months compared with the Zacks Broadcast Radio and Television industry’s decline of 12.9%.

NFLX’s Past Six-Month Price Performance

Netflix appears overvalued, trading at a forward 12-month price-to-sales of 7.05X compared to the broader Zacks Broadcast Radio and Television industry's forward sales multiple of 4.3X. NFLX carries a Value Score of D.

NFLX’s Valuation

The Zacks Consensus Estimate for NFLX’s 2026 EPS is pegged at $3.20, unchanged over the past 30 days. This indicates a 26.48% increase from the previous year.

Netflix, Inc. Price and Consensus

Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote

NFLX stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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