Billionaire investor Bill Ackman lost more than $400 million on Netflix Inc. (NASDAQ:NFLX) in 2022 after deciding its future was too difficult to predict. Four years later, he’s back, forecasting annualized investment returns above 20% despite another disappointing earnings reaction.
“We expect our go-forward IRR to be well into the 20s,” Ackman told CNBC Thursday.
From a $400 Million Loss to a ‘High-Growth Utility’
Ackman’s Pershing Square sold its entire Netflix stake in April 2022, just three months after buying it. Subscriber losses and uncertainty over advertising and password-sharing plans had shaken his confidence.
“We have lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty,” he wrote to investors.
Now Ackman calls Netflix a “high-growth utility,” citing subscriber loyalty, pricing power and earnings growth he expects to remain in the high teens to 20% for years.
“They’ve won the streaming wars. I don’t know who displaces Netflix,” he said.
Ackman even welcomed this week’s results, despite the post-earnings selloff.
“We actually view the quarter very favorably,” he said.
Netflix’s third-quarter operating income climbed 37% to $4.46 billion, while subscriber cancellations declined globally and in the United States despite recent price increases.
Why Ackman Welcomes Cheaper Shares
Netflix generated $2.9 billion in quarterly free cash flow and spent a record $4.8 billion repurchasing shares, its latest results showed.
Ackman believes falling share prices could benefit long-term investors by allowing Netflix to buy back more stock for the same money.
“We’ll make more money over time if the stock is cheaper in the short to intermediate term because they’re going to cancel a lot more shares as a result,” he said.
He described Netflix as trading at roughly 18 times earnings, although trailing profits include a one-time $2.8 billion payment received earlier this year following the failed Warner Bros. Discovery deal.
But Netflix’s growth is showing signs of strain. The company cut its advertising revenue forecast by $300 million to $2.7 billion, while its U.S. programming has reportedly struggled to produce major hits.
Netflix is bringing in a new content chief to turn things around, even as YouTube captures a growing share of Americans’ viewing time.
Investor and YouTube commentator Joseph Carlson pushed back on the YouTube threat in a video Wednesday.
“People do not necessarily cancel Netflix because they watch more YouTube,” Carlson said.
Ackman also said Meta Platforms Inc. (NASDAQ:META) could finance its ambitious AI expansion with additional borrowing, pointing to its $82 billion in cash and securities.
On Polymarket, traders gave Netflix a roughly 10% chance of reaching $75 by October’s end, about 12% above Thursday’s $67.05 close. The market had approximately $35,000 traded.
While prediction-market traders focus on the next few trading sessions, Ackman’s return to Netflix reflects a longer-term bet that rising profits and aggressive buybacks can deliver exceptional returns even as revenue growth slows.
Image: Shutterstock
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
To add Benzinga News as your preferred source on Google, click here.
