Core Insights - Netflix stock has surged over 70% in the past year due to effective strategies like cracking down on password sharing and introducing a cheaper ad-supported tier, which have boosted subscriber numbers and revenue [1] - Despite the positive momentum, there are concerns regarding the stock's valuation, as it appears expensive based on traditional metrics, raising questions about future performance if market sentiment shifts [3][7] Company Performance - Netflix currently has over 222 million paid members across 190 countries, generating $42 billion in revenue, with a market capitalization of $512 billion [5][7] - The company has experienced a revenue growth of 14.8% over the last 12 months and maintains an operating margin of 29.5% [7] Valuation Metrics - Netflix is trading at a P/E multiple of 49.9 and a P/EBIT multiple of 41.1, indicating a high valuation relative to earnings [7] - The stock has historically shown resilience, returning a median of 45% within a year following sharp dips since 2010 [7] Historical Stock Performance - During past downturns, Netflix stock has generally performed worse than the S&P 500, with a notable decline of 75.9% from a high of $691.69 in November 2021 to $166.37 in May 2022, compared to a 25.4% decline for the S&P 500 [8] - The stock fully recovered to its pre-crisis peak by August 2024 and has since reached a high of $1,339.13 in June 2025, currently trading at $1,203.50 [8] Downturn Resilience - In the 2020 Covid pandemic, Netflix stock fell 22.9% but recovered fully by April 2020, while in the 2018 correction, it fell 44.2% and also recovered by April 2020 [10] - The stock experienced a 55.9% decline during the 2008 financial crisis but recovered to its pre-crisis peak by March 2009 [10]