Netflix, Inc. (NFLX) reported a 23% Q3 FCF margin, leading to analysts raising their 2026 revenue estimates slightly. With NFLX stock down from its recent peak at $1,263.25, it now sits at $1,113.59, but could see a potential upside to $1,374 per share based on a 2.0% FCF yield.

The strong FCF margins from Q3 results have pushed Netflix’s FCF estimates higher for next year, with a YTD FCF margin of 22.9%. Analysts now forecast a 2026 FCF of $11.71 billion, up +10.3% from the run rate level, potentially leading to a higher target value for NFLX in the next 12 months.

Estimations suggest a potential 23.4% higher market value for NFLX in 2026, resulting in a $1,374 per share value, up from the current $1,113.59. Analysts also have an average price target of $1,341.62, supporting the idea that NFLX stock is undervalued.

Shorting out-of-the-money puts on NFLX provides investors with a good yield, with a 1.75% yield for 1 month if the stock stays above $1,065.00. This strategy offers downside protection and potential returns of over 10% in 6 months, making it an attractive option for investors looking to capitalize on NFLX’s undervaluation.

Read more at Barchart: Netflix Produces Strong FCF Q3 Margins