1 Underrated Reason Netflix's Growth Story Isn't Over

Netflix's (NASDAQ: NFLX) share prices have trended downward, for the most part, over the past six months. The company is dealing with several headwinds, including a recent earnings report that wasn't bad at all but came with weak guidance for the fiscal year 2026. Some also wonder what the streaming specialist's pending acquisition of parts of Warner Bros. Doscovery could do to its balance sheet.

Despite all of these potential problems, Netflix recently made a move that shows that its growth story is far from over. Let's look into it.

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Netflix gets into podcasts

Netflix's content strategy has been immensely successful. The company has created hugely popular TV shows and movies that have won countless awards, leading to a growing number of paid subscribers, deeper engagement on its platform, and a stronger network effect. However, these original creations are capital-intensive, as is licensing popular shows. In 2025, Netflix said it planned to spend $18 billion on content. Recently, the company started entering the video podcast space.

It has struck deals with Spotify, iHeartMedia, and Barstool Sports to bring a long list of popular podcasts from those platforms into its ecosystem. This move could help the company in several ways. First, it could boost engagement. Podcasts have become more popular in recent years. Many attract niche audiences who enjoy following episode after episode, some of which can last longer than movies.

Second, creating and licensing podcasts will likely be much cheaper for Netflix than its original content strategy while still helping attract paying members and driving higher engagement. Third, Netflix will be able to compete with other platforms -- especially YouTube -- to become the home of video podcasts.

Why Netflix is still a buy

Netflix's move into video podcasts shows that the company still has niches it can enter to improve its business and financial results. The streaming specialist is also looking to expand into live events and sports. Meanwhile, as Netflix has pointed out, it has a large addressable market as it still accounts for less than 10% of television viewing time even in its most advanced markets. And the company's ad business is still ramping up. Netflix expects ad revenue to double this year to $3 billion.

While that still represents a small fraction of the company's annual revenue, initiatives like TV, video podcasts, and a push into sports can all help increase engagement and drive higher ad sales even without additional paying subscribers. Of course, Netflix will not give up the content strategy that has made it so successful. It will continue creating original movies and TV shows. But the company is diversifying its content universe, and that's a great reason to think its growth story isn't over. That's why Netflix's shares are still worth investing in.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix, Spotify Technology, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.