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Netflix reported better-than-expected Q4 2025 financial results, as it added 23 million net new members last year.
A high valuation, as well as uncertainty and risk surrounding the Warner Bros Discovery acquisition, should force investors to think twice.
Netflix (NASDAQ: NFLX) just reported Q4 2025 revenue and earnings per share that came in ahead of Wall Street analysts' estimates. This might not be surprising news to investors, as it seems the streaming juggernaut has consistently operated from a position of fundamental strength.
Shares have risen 691% in the past 10 years as of Jan. 21, but they're well off the peak right now. Should you invest $1,000 in Netflix stock?
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Netflix.
While the company stopped revealing every quarter what its customer count is, Netflix just told shareholders that it ended 2025 with 325 million subscribers. That's up 23 million from 12 months before.
What's more, advertising revenue, a relatively new business line, climbed more than 150% last year. That growth was in line with what management previously expected.
Netflix might be firing on all cylinders, but the stock's valuation is still expensive. Shares trade at a price-to-earnings ratio of 35. Investors should wait for a more compelling entry point.
The pending acquisition of Warner Bros Discovery's film and TV studios, HBO Max, and content catalog in a new all-cash offer adds a lot of uncertainty to the mix as well. At a time when its business is thriving, there is a major risk that Netflix overpays and ends up saddled with excess debt, while figuring out how to integrate the new assets it just bought.
Investors shouldn't buy the stock with $1,000 today.
Before you buy stock in Netflix, consider this:
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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $464,439!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,150,455!*
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
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