Netflix Ad-Tier Growth Accelerates: Is the Stock Finally Breaking Out?

Netflix's NFLX advertising business continues to accelerate with significant momentum heading into 2026, positioning the company's ad-supported tier as a major growth driver. The streaming platform reached 190 million monthly active viewers globally as of November 2025, representing a substantial expansion from 94 million monthly active users reported in May 2024. This growth reflects Netflix's strategic shift toward a new measurement methodology that multiplies ad viewers by estimated household size, providing a more comprehensive view of advertising reach.Third-quarter 2025 results demonstrated strong advertising traction, with revenues climbing 17.2% year over year to $11.51 billion. Netflix reported its strongest advertising quarter to date and confirmed plans to double ad revenues in 2025.The company has expanded its advertising infrastructure through programmatic partnerships with Amazon, Google Display & Video 360, The Trade Desk, and Yahoo DSP. Netflix announced plans to test interactive video advertisements in the United States and Canada, with global rollout scheduled for second-quarter 2026. Advanced targeting capabilities launching in 2026 will enable advertisers to reach audiences by education level, marital status, household income, and high-propensity viewers for categories, including luxury vehicles and travel packages.Dynamic ad insertion technology is being tested with WWE programming and will expand across Netflix's NFL Christmas Day games and additional live titles throughout 2026, creating new revenue opportunities within the platform's growing live content portfolio.Competitive Landscape in Ad-Supported StreamingDisney DIS and Amazon AMZN are pursuing distinct advertising strategies in streaming. Disney reported that its combined Disney+ and Hulu platform reached 196 million subscriptions in fourth-quarter fiscal 2025, adding 12.4 million subscribers sequentially, with domestic advertising revenues increasing 8% year over year. Amazon's advertising services generated $17.7 billion in third-quarter 2025, up 24% year over year, driven by Prime Video's ad-supported audience of 130 million monthly viewers in the United States alone. Amazon exceeded internal expectations for upfront advertising commitments tied to live sports programming, including Thursday Night Football and NBA coverage. Disney continues integrating advertising across its streaming properties while Amazon leverages its demand-side platform to sell inventory across multiple streaming services, including Netflix and Disney+, creating cross-platform advertising opportunities.NFLX’s Price Performance, Valuation & EstimatesShares of Netflix have plunged 28.3% in the past six-month period compared with the Zacks Broadcast Radio and Television industry’s decline of 13.8%.NFLX’s 6-Month Price PerformanceImage Source: Zacks Investment ResearchFrom a valuation standpoint, Netflix appears overvalued, trading at a forward 12-month price-to-sales ratio of 7.47X compared with the broader Zacks Broadcast Radio and Television industry's forward sales multiple of 4.3X. NFLX carries a Value Score of D.NFLX’s ValuationImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for NFLX’s 2025 earnings is pegged at $2.53 per share, unchanged over the past 30 days. This indicates a 27.78% increase from the previous year.Netflix, Inc. Price and Consensus Netflix, Inc. price-consensus-chart | Netflix, Inc. QuoteNFLX stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Just Released: Zacks Top 10 Stocks for 2026Hurry – you can still get in early on our 10 top tickers for 2026. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful.From inception in 2012 through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2026. You can still be among the first to see these just-released stocks with enormous potential.See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis Report The Walt Disney Company (DIS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks