Netflix (NFLX) shares have fallen 40% over the past twelve months, while the S&P 500 returned 17.0%, and now trade at 21.6 times earnings, well below the 39.7 average P/E over the last twelve quarter-ends (excluding readings above 100). The article's scenario puts a share at $94.87 in three years versus $70.30 today, a 35.0% gain that comes entirely from assumed revenue growth of 13.6% a year, with the P/E held constant and a lower net margin than today. Management said growth will come from adding members, price increases and ads revenue, yet revenue grew 13.4% in fiscal Q2 2026 and guidance for fiscal Q3 is 12%, both below the assumed pace. The trailing net margin of 28.2% is well above the three-year average of 20.7%, and a return to that average would remove most of the gain. If revenue grew only 2.8% a year, the three-year return would be zero.
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