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Exclusive Article Netflix Just Set a Hard Low—Is This The Start of a 40% Rally?Author: Sam Quirke. Article Published: 1/30/2026. 
At a Glance - 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. Having fallen as much as 40% from last summer's all-time high, Netflix was one of the worst-performing mega-cap stocks in 2025. Sentiment was washed out, growth prospects looked shaky, and 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 after its Q4 report and have held support since the release. 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. After the preceding selloff, there now appears to be a meaningful shift in tone. With earnings out of the way and much of the downside already priced in, the risk-reward balance is tilting toward the bulls—let's take a closer look at how much upside could follow. The Earnings Band-Aid Has Been Ripped Off The Q4 report wasn't a blowout, but it didn't need to be. Netflix topped analyst expectations on both revenue and earnings, enough to challenge the prevailing bearish narrative and force skeptics to reassess. Revenue grew more than 17% year-over-year, free cash flow was strong, and the company's global audience is approaching a billion users. Taken together, those metrics make the most bearish positions harder to justify. After months of selling, the market was braced for further disappointment. Instead, Netflix delivered resilient results consistent with a business that is still growing—just not at the breakneck pace investors once expected. Equally important, the earnings release removed a major source of uncertainty. For weeks, investors had been 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. The stock gapped down the morning after the release and then immediately bounced. While it's still unclear if Netflix will break out of its multi-month downtrend, that behavior is a constructive start. This matters in the current 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 that show improving fundamentals and bullish price action tend to attract attention. Analysts Are Leaning Back In With this setup emerging, it's no surprise analysts are revisiting their views. In the week since earnings, Loop Capital, UBS Group, and Robert W. Baird have all reiterated Buy or equivalent ratings. Baird's $120 price target is notable, implying more than 40% upside 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 through 2026, with additional room to grow as pricing power and engagement improve. When multiple firms converge around a recovery thesis after a prolonged selloff, it's a signal that sentiment may be turning. The Outlook From Here Netflix is not risk-free. Bears will point to the ongoing bidding war for Warner Bros. as a source of uncertainty and potential distraction. Still, there is a growing sense that once that deal is resolved, regardless of the outcome, a significant overhang will be lifted. Markets dislike uncertainty almost as much as bad news, and Netflix has traded under that cloud for months. The key near-term indicator is price action. If Netflix shares can continue holding above last week's low into the first few weeks of February, the groundwork for a sustained recovery will be much stronger. Investors should continue to watch subscriber trends and ad monetization as the primary fundamental drivers going forward.
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