Netflix May Be Down, But This Winning Stock Isn't Going Anywhere

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Key Points

Netflix has nearly displaced cable television as people's first viewing choice when they turn on their television sets.
No other rival streaming service even comes close to making the same claim.
Netflix's high-quality content gets much of the credit for making it the go-to platform, boding well for the upcoming launch of an ad-supported version of the service.
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NASDAQ: NFLX

Netflix

Market Cap$431BToday's Changeangle-down(0.35%) $0.33Current Price$94.33Price as of December 19, 2025 at 3:59 PM ET

Recent challenges aside, the company's service is the default choice for many consumers when it comes to watching TV.

There's no two ways about it. Netflix (NFLX +0.35%) stock has been tough to hold onto this year. In the wake of two consecutive quarters of subscriber losses, shares are currently priced more than 65% below their all-time high, and that's with their respectable rebound from June's low. The advent of rival services like Warner Bros. Discovery's HBO Max and Walt Disney's Disney+ are taking a toll on the streaming pioneer's dominance of the market.

But if you think Netflix stock is to be avoided as a company past its prime, think again. This old dog is learning a new trick that could rekindle its growth and its stock. More than that, current Netflix subscribers remain incredibly loyal to the service, choosing it more than any other streaming option when they turn on their TVs.

Seriously, people love their Netflix

That's not an arbitrary claim either. Market research outfit Hub Research polled 1,600 adults last month and found that for 23% of them, Netflix is the first place they go when they want to watch television. That's better than the other top-six streaming platforms ... combined. Perhaps more notably, that figure is nearing cable television's ever-declining status as consumers' first TV-viewing choice, which slipped to 28% in Hub's most recent poll.

Hub Entertainment Research reports that Netflix is the first TV-viewing choice for 23% of U.S. consumers.

Image source: Hub Entertainment Research.

Soak that in for a moment. From a headcount perspective, other on-demand platforms are undeniably making waves for Netflix. From a usage perspective, though, no other option even comes close.

Then again, this measure of interest can't be too terribly surprising in light of another finding Hub Research made with its most recent inquiry of consumers. The August poll also shows that if forced to limit themselves to only one TV-watching option, 30% would pick Netflix. That's more than twice the next-nearest streaming service, Amazon Prime.

Advertisement Consumers are almost as committed to Netflix as they are to cable television.

Image source: Hub Entertainment Research

As the graphic also illustrates, while the relatively young HBO Max has generated quite a buzz, loyalty to the platform is low. And again, notice how the commitment to Netflix is almost as strong as consumers' commitment to cable TV itself.

It's all about the quality content

It's an encouraging backdrop as the launch date for the ad-supported version of Netflix nears.

Consumers are willing to pay for more than one streaming service as the average U.S. household is now paying for 4.7 services, according to an estimate from Kantar. Bear in mind that's an average, which means some are paying for even more. However, the cost of at-home entertainment is reaching uncomfortable levels for some; the same dynamic applies outside of the United States. While there's no official measure of how much subscription fatigue has stifled Netflix's subscriber growth, it would be short-sighted to assume it's not a headwind for the company.

A lower-cost, ad-supported option to watch Netflix, however, addresses this challenge head-on.

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NASDAQ: NFLX

NetflixToday's Change(0.35%) $0.33Current Price$94.33

Key Data Points

Market Cap$431BDay's Range$93.46 - $95.5352wk Range$82.11 - $134.12Volume3.5KAvg Vol43MGross Margin48.02%

And yes, people are more open to the occasional television commercial than you might think. Research undertaken by Morning Consult suggests nearly 60% of consumers would prefer an ad-supported streaming service if it meant a lower price than an ad-free option. Hub Research has found the average consumer expects to pay about $5 less per month than the ad-free option's price to digest the occasional advertisement.

That's roughly the savings users of the ad-supported version of Netflix will see when the service begins launching in select markets in November.

The real upshot here, however, is quality. People navigate to Netflix first because it has the entertainment content they want to watch the most. Although not everything available with the premium ad-free version will be offered in the ad-supported version, Chief Content Officer Ted Sarandos has made clear that most of it will be watchable with the lower-cost offering. Perhaps most importantly, Netflix originals like The Sandman, Cobra Kai, and The Crown will be viewable with the new service. It's likely this kind of original content is what's making Netflix the default TV-viewing platform for more consumers than any other streaming option.

Not great, but Netflix's "good" is still better than most

Are Netflix's very best days behind it? Probably, and particularly if you're talking about subscriber growth. While a lower-cost version of the service is sure to draw a sizable crowd, the streaming market is overwhelmingly competitive now.

If you fear Netflix is a has-been though, fear not. The past couple of quarters are just a rough patch as the company comes down from the incredible adoption it saw during the height of the COVID-19 pandemic, and that growth was never going to be sustainable. With what's arguably the highest-quality library of content in the streaming market -- as evidenced by the data above -- Netflix is going to be fine. Another good wave of scale-building growth is in the cards on the heels of the impending launch of the ad-supported option.

More to the point for investors, the size of the stock's rout since late last year doesn't make a ton of sense. This steep pullback is a good chance to plug into the company in front of the launch of what should be a significant profit center.