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Today's Bonus Story Netflix Just Set a Hard Low—Is This The Start of a 40% Rally?Authored by Sam Quirke. Published: 1/30/2026. 
Quick Look - Netflix stock has stabilized after a brutal selloff, with last week’s earnings removing a major overhang.
- The stock is continuing to trade above its recent low as expectations build for a recovery rally.
- Analysts are calling for as much as 40% upside in the months ahead.
Shares of Netflix Inc (NASDAQ: NFLX) may finally be showing signs that the worst is over. After falling as much as 40% from last summer's all-time high, Netflix was one of 2025's worst-performing mega-cap stocks. Sentiment had been washed out and growth prospects looked dim, so the company went into its Jan. 20 earnings report with very low expectations. That may have helped. Netflix shares put in a clear low immediately following its Q4 earnings report and have held support since. The former CEO of Google calls it the most important thing to happen in 500, maybe 1,000 years of human society. A former U.S. Treasury Secretary says when your great-grandchildren write the history of this period, the political headlines will be the second or third story. The first story is something none of us have seen before. The dot-com collapse, global financial crisis, and COVID-19 pandemic don't compare to what's coming next. We may be entering a period of dramatic, almost unimaginable change. See the full warning and how to prepare now. Given the preceding selloff, there appears to be a meaningful shift in tone. With earnings behind it and much of the downside seemingly priced in, the risk-reward balance is tilting toward the bulls—let's take a closer look at how good a recovery could be. The Earnings Band-Aid Has Been Ripped Off The Q4 report wasn't a blowout, but it didn't have to be. Netflix topped analyst expectations on both revenue and earnings, enough to challenge the prevailing bearish narrative. Revenue was up more than 17% year-over-year, free cash flow came in strong, and the company continues to build a global audience approaching a billion users. Those results make the bearish case harder to defend. After months of selling, the market expected further disappointment. Instead, Netflix delivered solid, resilient results consistent with a business that is still growing—even if not at the breakneck pace investors once expected. Just as importantly, the earnings report removed a major source of uncertainty. For weeks, investors were waiting to see whether Netflix would stumble again; with that hurdle cleared, the stock has been given room to breathe. Price Action Is Starting to Look Good From a technical perspective, the post-earnings price action is encouraging. After gapping down the morning after the release, Netflix shares bounced quickly. While it's too early to say whether the stock will break its multi-month downtrend, that behavior is a positive start. This is especially relevant given the broader market backdrop. Equity markets have shifted back into risk-on mode, with the S&P 500 notching fresh record highs. In that environment, deeply discounted mega-cap names with improving fundamentals and bullish price action tend to attract investor attention. Analysts Are Leaning Back In With this setup emerging, it's no surprise analysts are starting to call Netflix a buy. In the week since earnings, firms such as Loop Capital, UBS Group, and Robert W. Baird have reiterated Buy or equivalent ratings. Baird's $120 price target is notable, implying upside of more than 40% from current levels. Wedbush has also taken a bullish stance, highlighting Netflix's advertising business as a key driver of future upside. The firm expects ad revenue to at least double over the course of 2026, with room for further growth as pricing power and engagement improve. When multiple firms converge on a recovery thesis after a prolonged selloff, it's a sign that sentiment may be turning. The Outlook From Here Netflix is not risk-free. Bears will rightly point to significant uncertainty around the ongoing bidding war for Warner Bros. Still, there's a growing sense that once that deal is resolved, regardless of the outcome, a major overhang will be removed. The market dislikes uncertainty almost as much as bad news, and Netflix has traded under that cloud for months. The key for now is price action. Watch for Netflix shares to hold above last week's low. If they can sustain that level through the first few weeks of February, the groundwork for a more sustained recovery will be in place.
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