NFLX is undervalued; strong fundamentals (16% rev growth, up engagement) contradict bearish narratives, and P/E compression from 50x to 22x creates opportunity.

Now the next company I believe is the most undervalued in my portfolio or very close to it today which is Netflix. Netflix has gone down like crazy. Netflix is taking punches left and right.

It's getting beat up by the market. Everyone's concerned about it. Everyone believes that people are going to cancel all their accounts, that engagement's going down, that YouTube TV is stealing all their viewers, that none of their content's good.

But when you look at the actual numbers, none of that is reflected in their actual performance.

Ted Sarandos, the co-CEO of the company, said that engagement is actually up 2% year-over-year. He also said that people's viewing habits of second seasons is improving year-over-year, not declining.

So, engagement from season 1 to season 2 has actually improved and that many of the narratives around this company are just false.

It just grew 16% which is fast revenue growth. We have total subscribers continuing to to go up. 325 million was the last number that they revealed.

We have Netflix's content budget, which is increasing a little bit, but their revenue is growing faster, creating operating leverage. And meanwhile, the valuation on a price to earnings continues to get crushed.

It was in September of 2025 trading at a 50 trailing PE ratio. Now, it's trading at a 22.

I like YouTube. Who doesn't like YouTube? But Netflix is going to be fine. People have enough time and money. They really do. They have enough time and money to have a YouTube premium membership for like 12 or $15 a month, whatever that is. and a Netflix membership for $8 a month.

People can afford $20 a month for the biggest libraries of entertainment in modern history. I think most people will be willing to pay for both of those. So, I don't see the big panic that a lot of people see.

I think that Netflix is a company that goes through periods of really good content, then content that's not so good, but they'll have more hit shows in the future. They're continuing to invest $20 billion a year.