Netflix NFLX continues to strengthen its advertising platform, positioning the business as an increasingly important growth driver beyond subscription revenues. The company is expanding its in-house ad technology, broadening advertiser access and improving campaign measurement, steps expected to help it capture a larger share of the growing connected television advertising market. This complements Netflix’s expanding global audience and engagement, creating a differentiated value proposition for advertisers.
The advertising business has already begun scaling meaningfully. Projections point to advertising revenues nearly doubling to around $3 billion for 2026, supported by strong advertiser adoption. The advertiser base expanded more than 70% in 2025 to over 4,000 advertisers, while programmatic buying is on track to account for more than half of the non-live advertising business, signaling improved platform adoption.
Netflix is simultaneously enhancing its proprietary Netflix Ads Suite. Updates include expanded targeting, improved frequency management across streaming services and additional audience measurement tools. The company has also broadened integrations with leading demand-side platforms, easing programmatic buying and improving campaign efficiency, investments that could strengthen advertiser retention and attract incremental ad budgets over time.
However, Netflix remains smaller in scale than entrenched connected television advertising players and sustained adoption of new formats and measurement tools will be necessary to narrow that gap.
The expanding advertising ecosystem is expected to support long-term revenue growth while diversifying Netflix’s monetization model beyond subscriptions. The Zacks Consensus Estimate for second quarter 2026 revenues is pegged at $12.57 billion, indicating growth of 13.5% year over year, indicating advertising’s rising role in sustaining top-line growth ahead.
Netflix faces Stiff Competition
Netflix faces competition from peers like Roku ROKU and Amazon AMZN, which continue to invest in their connected TV advertising businesses. Roku is expanding its advertising platform with AI-powered optimization, identity solutions and advanced measurement capabilities to improve campaign performance. Meanwhile, Amazon is strengthening Prime Video’s advertising ecosystem by leveraging its extensive ad-tech infrastructure, first-party shopping data and programmatic capabilities. While Roku and Amazon continue to broaden their advertising ecosystems, Netflix’s expanding Ads Suite, growing advertiser base and rising programmatic adoption are expected to strengthen its competitive position and support long-term advertising revenue growth.
NFLX’s Price Performance, Valuation & Estimates
Shares of Netflix have dropped 21.3% in the year-to-date period compared with the broader Zacks Consumer Discretionary sector’s decline of 9.5%.
NFLX’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Netflix appears overvalued, trading at a forward 12-month price-to-sales ratio of 5.72X, higher than the industry‘s 3.98X. NFLX carries a Value Score of D.
NFLX’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $3.60 per share. This indicates a 42.29% increase from the previous year.
Netflix, Inc. Price and Consensus
Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote
NFLX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Netflix, Inc. (NFLX) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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