Netflix is strategically pivoting toward live TV services, moving away from its exclusive focus on on-demand content, with management projecting advertising revenue to hit $3 billion by 2026. Over 60% of new subscribers are now opting for the ad-supported tier, driving significant growth in that segment. Financially, the company is trading at a forward earnings multiple of 20.57x, well below its five-year average, leading analysts like Jim Cramer to defend its valuation at 19x earnings.
Financial commentator Jim Cramer recommends buying Netflix, arguing the stock is undervalued at 19x earnings following a significant price decline.
Read the full storyNetflix trades at a 20.57x forward P/E, significantly below its historical average, as ad-tier adoption among new users exceeds 60%.
The streaming giant is exploring live TV services to sustain valuation, marking a departure from its traditional on-demand roots and introducing new competitive risks.