Buy tech sell-off, Wedbush’s Ives says: ’this is a 1996 moment, not 1999’
Investing.com -- Netflix Inc (NASDAQ:NFLX) shares have surged 65% over the past 12 months, outperforming the Nasdaq Composite, yet analysts remain split on whether this rally has room left to run. Wolfe Research is firmly in the bullish camp, citing durable growth, a premium content strategy, and a valuation premium justified by strong earnings momentum.
In a recent note, Wolfe analyst Peter Supino reiterated an “Outperform” rating and a $1,390 price target, stating plainly “we are buyers of NFLX.” Supino pointed to Netflix’s expected compounded annual EPS growth of 22% through 2030 and a sustainable P/E of 28.5x based on Wolfe’s 2027 EPS forecast of $40.4.
Despite those optimistic views, Investing.com’s WarrenAI is quick to point out Netflix’s current stock price of $1,204.21, sitting well above its Investing Pro fair value estimate of $924.48, signaling a potential downside of 23.2%. The conflicting signals between fundamental models and momentum-based trading strategies illustrate the tension between valuation gravity and innovation optimism.
Wolfe’s thesis argues that concerns about generative AI replacing premium content are overstated, noting that "3Q results & the 2026 outlook won’t be pressured by AI.” Supino emphasized improving engagement figures and a compelling pricing edge as additional pillars for Netflix’s positioning in the market.
In contrast, WarrenAI adds a cautionary tone: “The engine is strong, but the price of admission is steep.” While highlighting Netflix’s stellar Piotroski Score (9) and projected FY2025 EPS growth of 35.1%, Investing.com’s AI tool underscores the stock’s high valuation, forward P/E of 43.4x, and elevated volatility, which may give pause to value-focused investors.
A key dynamic driving bullish sentiment is Netflix’s evolving revenue model, which increasingly relies on ad-supported subscriptions and live event programming. Wolfe also notes that after Disney’s recent price hikes, Netflix’s pricing now appears more attractive relative to peers, reinforcing its status as a primary content destination.
Ultimately, whether to buy Netflix at current levels boils down to investor conviction in the company’s ability to justify its premium via continuous innovation and earnings growth. As Wolfe asserts, valuation risk is mitigated by operational execution, but with shares sharply above fair value estimates, traders might prefer to stay on the sidelines until a more opportune entry.