Guggenheim’s Michael Morris says Netflix Inc. (NASDAQ:NFLX) remains a Buy despite a guidance miss, citing strong long-term growth and valuation support.

Valuation And Expectations Drive Near-Term Reaction

Michael Morris told CNBC last Friday that the stock remains attractively valued based on its multi-year growth potential.

He explained the recent pullback reflects elevated expectations, with over 80% of investors anticipating a margin guidance increase that did not happen.

While he understood the reaction after the rally tied to the Warner Bros. Discovery, Inc (NASDAQ:WBD) deal news, he stressed that the long-term story remained intact and included additional “option value” not yet reflected in the share price.

Long-Term Growth Targets Still Intact

He said Netflix continues to track toward its longer-term goals, referencing previously outlined five-year ambitions.

Morris described the latest quarter as a “beat and maintain,” supporting expectations for strong double-digit revenue growth, high-teens operating profit growth, and more than 20% earnings growth through the end of the decade.

He added that long-term investors are likely to stay confident in the company’s ability to compound growth.

Leadership Transition And Strategy Evolution

Morris acknowledged that Reed Hastings stepping away may weigh on short-term sentiment.

However, he points to continued leadership under Ted Sarandos and Greg Peters as a stabilizing factor. He also noted Netflix’s evolving strategy—including advertising and potential acquisitions—adding that recent experience has strengthened its M&A capabilities, even if no major deals are currently expected.

NFLX Price Action: Netflix shares were up 0.15% at $97.45 during premarket trading on Monday, according to Benzinga Pro data.

Image via Shutterstock