Netflix stock rebounds as growth strategy supports revenue and earnings ahead of Q1 results

Netflix shares have come under pressure following the company’s unsuccessful pursuit of Warner Bros. Discovery assets. Still, Netflix’s multi-pronged growth strategy is producing results, supporting revenue and profit momentum. The upcoming first-quarter earnings report—scheduled for release after the market close on April 16—will be a key test for the streaming company.

What’s on the horizon for Netflix

Netflix’s management has been expanding its approach to attract and retain viewers. After the ad-supported tier delivered strong results, the company is broadening into new entertainment categories, increasing live content and sports coverage, and leaning further into video games. Netflix is also building out video-first podcasts and official companion shows.

In addition, Netflix has continued to demonstrate pricing power. The company recently raised prices for all U.S. plans by a dollar or two.

Advertising growth and financial performance

Netflix is already seeing benefits from its advertising strategy. Ad revenue more than doubled in 2025, rising 150% to $1.5 billion. Co-CEO Greg Peters said the company expects ad sales to roughly double again, reaching $3 billion in 2026.

Netflix’s recent results reflect this broader strategy. In the fourth quarter, the company generated revenue of $12 billion, up 18%. Earnings per share (EPS) were $0.56, up 30%. Management attributed the performance to more subscriptions and growing ad revenue.

For the first quarter, Netflix is expecting continued momentum, with revenue of $12.16 billion, up 15%, and EPS of $0.76, also up 15%.

Valuation and what investors are watching

Despite the recent rebound in the stock, Netflix still trades at a premium. The shares are valued at 38 times earnings, which is below the company’s three-year average multiple of 45. Netflix also trades at 30 times forward earnings, which the article describes as reasonable for a company expected to grow sales and profits by double digits over the next five years.

After the company abandoned its Warner Bros. Discovery-related pursuit in late February, the stock has climbed more than 25% (as of the article’s writing), following a decline of as much as 43% from its mid-2025 peak.

Impact and outlook

With the first-quarter report on April 16, investors will be looking for confirmation that Netflix’s advertising expansion, pricing actions, and content strategy are continuing to translate into sustained revenue and profit growth.

Based on the evidence presented—strong revenue and profit growth, expanding programming, and accelerating advertising—the article argues that Netflix shares are a buy, particularly while the stock remains “on sale.”