Wedbush Is Betting That Netflix Can Double Ad Revenue in 2026. Does That Make NFLX Stock a Buy Here?

Core Viewpoint - Netflix shares have experienced a significant decline of 22.66% over the past three months, with even a strong fourth-quarter earnings report failing to improve investor sentiment [1] Financial Performance and Outlook - Concerns regarding management's expense outlook have contributed to the stock's weakness, as Netflix has indicated a modestly faster growth in expenses this year compared to last year, raising profitability concerns [2] - Despite the current challenges, Wedbush Securities argues that the selloff is due to inflated expectations rather than deteriorating fundamentals, suggesting that the high benchmark for success has led to perceptions of underperformance [3] Advertising Revenue Potential - Wedbush believes that the market is undervaluing Netflix's long-term advertising opportunity, viewing global advertising as a significant growth engine still in its early stages [4] - The firm projects that ad revenue could at least double to $3 billion by 2026, with further growth potential extending into 2027 and beyond, especially if Netflix successfully completes its pending deal with Warner Bros. Discovery [4] Company Overview - Netflix, headquartered in Los Gatos, California, has transformed from a DVD rental service to the leading streaming platform globally since its shift to video on demand in 2007 [6] - The company currently has a market capitalization of approximately $364.9 billion and serves around 325 million paid subscribers, continuing to disrupt traditional media models through its extensive content acquisition and production [7]