Jim Cramer's Bold Stance: Why Netflix is a Buy, Not Broken, Despite Q2 Disappointment

You know, when a company like Netflix, a household name really, takes a bit of a tumble, folks often start wondering if it's all over. But on a recent segment of CNBC's "Mad Money" back on July 20, 2026, the ever-opinionated Jim Cramer threw cold water on that notion, stating quite emphatically that Netflix is "not a broken company" at all. In fact, he sees it as "one of the best companies around with one of the best products." Quite a ringing endorsement, wouldn't you say?

In fact, Cramer sees opportunity precisely in the recent slide. With the stock price dipping into the high-$60s, he suggested it's looking rather attractive – its cheapest valuation since way back in 2022, trading at roughly 19 times forward earnings. His advice? Don't dive headfirst, but maybe "start buying" with a small, initial position, and then gradually add more if it dips further. A classic strategy, really, for those who believe in a company's long-term prospects.

What fuels this optimism, you might ask? Well, Cramer pointed to a few key areas. For starters, Netflix has been quite aggressive with share buybacks – they snapped up a hefty $4.7 billion worth in the second quarter alone, and get this, they still have a staggering $27 billion authorized for future buybacks. That's a strong signal, telling us management believes deeply in their own company's intrinsic value. Beyond that, there's genuine growth potential in new ventures: advertising, which he projects could double to $3 billion this year, plus exciting forays into live programming and, believe it or not, even gaming.

Now, let's be fair, Cramer isn't wearing rose-tinted glasses here. He readily acknowledged that Netflix's Q2 2026 report, which came out on July 16th, was, well, a "disappointment." They actually missed Wall Street's revenue expectations, reporting $12.56 billion against a higher forecast. Not only that, but they also had to trim their full-year revenue growth outlook to a more modest 13-14%, down from 16.5% in the previous year. And yes, he also conceded that the content slate felt a bit "weakening," which is never good for a streaming giant built on compelling content.

Adding to the unease on Wall Street was Netflix's somewhat controversial decision to reduce its disclosures. They moved their "What We Watched" engagement report to an annual release, having already stopped providing quarterly membership numbers last year. It’s almost like they’re saying, 'Trust us,' but investors often prefer transparency, don't they? Because of these factors, Cramer was quick to caution that this "weakness sticks with us for a while" and advised against expecting any kind of immediate, dramatic rebound. It’s more of a long game, it seems.

So, there you have it. While Netflix certainly has some choppy waters to navigate and some challenges to address in the short term, Jim Cramer, with his characteristic conviction, clearly believes the company isn't fundamentally broken. Instead, he sees a compelling opportunity for investors willing to take a measured, long-term approach, betting on Netflix's product strength, strategic growth initiatives, and commitment to returning value to shareholders.