This Once High-Flying Growth Giant Has a Unique Story -- and Could Be Turning Into an Attractive Value Stock

4 days ago 7

Dan Caplinger, The Motley Fool

Wed, February 11, 2026 astatine 11:24 AM CST 4 min read

Part of gaining acquisition arsenic an capitalist is knowing the lifecycle that astir companies face. Many investors commencement retired by becoming acquainted with a institution astatine the highest of its success, having generated beardown maturation and seeming to beryllium connected a way that volition pb to adjacent greater heights for gross and profits. Sometimes, that maturation tin proceed for a agelong time. Eventually, though, astir companies scope a constituent astatine which what has worked successful the past nary longer works rather arsenic well, forcing them to power gears and effort thing new. When that happens, it tin origin a large displacement successful sentiment and make a situation for longtime shareholders to fig retired what to bash next.

In creating the Voyager Portfolio, 1 of my goals was to screen companies that don't get precise overmuch attention. In that light, it mightiness marque precise small consciousness to look astatine streaming video elephantine Netflix (NASDAQ: NFLX), which has 1 of the champion way records successful the Motley Fool beingness arsenic a longtime recommendation. However, Netflix makes a large illustration of a institution has dealt with increasing pains successful the past and present finds itself successful a akin predicament today. With that successful mind, this three-part bid connected Netflix volition analyse the maturation stock's history, its financials, and its aboriginal prospects.

Will AI make the world's archetypal trillionaire? Our squad conscionable released a study connected the 1 little-known company, called an "Indispensable Monopoly" providing the captious exertion Nvidia and Intel some need. Continue »

Person with popcorn looking astatine a TV.

Netflix got going successful the precocious 1990s, and its concern primitively looked thing similar what the institution does today. Using a decidedly low-tech concern strategy, the institution co-founded by Reed Hastings had a precise elemental idea: alternatively than forcing consumers who wanted to rent movies and videos to permission their homes and sojourn a retail determination -- astir commonly tally by manufacture person Blockbuster Video -- Netflix would message DVDs straight to viewers.

That strategy worked well, and Netflix tapped into the then-fledgling net to adhd to users' convenience. One large breakthrough happened not agelong aft the company's founding. Rather than charging for each rental similar Blockbuster did, Netflix offered subscription services that allowed members to person a definite fig of DVDs retired astatine immoderate fixed time. Once you returned 1 DVD, you could acceptable up a queue that would automatically nonstop the adjacent DVD connected your database to you. This strategy removed 1 of the biggest hassles of video-store rentals, the precocious fee, due to the fact that subscriptions didn't hinge connected however galore movies you watched. Netflix was blessed to fto you bent onto a DVD for the full period arsenic agelong arsenic you paid the subscription fee.