$NFLX Down 42%: Undervalued Opportunity or Value Trap?

Netflix shares have fallen 42% from their all-time high, raising questions about whether the stock has become undervalued or is turning into a value trap.
Bill Ackman’s Pershing Square recently built a 3.15 million-share position in $NFLX, representing 4.9% of the portfolio. Netflix reported $12.4 billion in second-quarter revenue, up 13.2% year over year, and management expects 13% to 14% full-year revenue growth.
Profitability has also continued to improve, with gross margin approaching 52% and operating margin reaching 33.4%. Netflix has more than 325 million paid subscribers globally and repurchased $9.9 billion of its shares over the past 12 months.
Consensus data cited in the article projects Netflix could generate $22 billion in free cash flow by 2030. Of 32 analysts covering the stock, 24 rate it Buy and eight rate it Hold, with an average price target of $95.5.