Netflix is a pioneer in subscription video on demand, revolutionizing the media industry. Now, it’s at the center of a big media merger, acquiring most of Warner Bros. Discovery. The uncertainty and fears of a bidding war have led to a sharp sell-off in Netflix’s shares.

The ongoing merger talks have created significant uncertainty, but Netflix’s core operations appear to be trading at a discount. Despite the complexity, Netflix’s simple model produces strong operating earnings growth over time, with consistent improvements in operating margin and strong free cash flow conversion.

Netflix’s all-cash offer to acquire Warner Bros. Discovery includes taking on $52 billion of debt. The deal is expected to be accretive to Netflix’s earnings per share within its second year, with $2-3 billion in cost savings by year three. The addition of Warner Bros. studio assets will provide vertical integration and add uncertainty to revenue.

After a sell-off, Netflix now trades for just 25 times forward earnings estimates, reflecting increased uncertainty from the acquisition. With strong execution on the core business and potential upside from the merger, Netflix stock presents a great investment opportunity at this price. Management has consistently delivered operating margin improvements and shown strong free cash flow conversion over the years.

Read more at Yahoo Finance: Stock to Avoid or Once-in-a-Decade Opportunity?