Netflix (NASDAQ: NFLX) was once a crown jewel of the FAANG group, alongside Meta, Amazon, Apple, and Alphabet.

But as investors shifted focus to the Magnificent Seven, Netflix got left behind.

>>> Wall Street Maintains Bullish Outlook on NVIDIA Stock Ahead of FQ1 2027 Earnings

Despite this, the streaming giant has matched the S&P 500's performance over the past five years.

With a solid first-quarter earnings report and a price-to-earnings ratio of 28, some see upside potential.

However, a closer examination is needed to determine if this forgotten FAANG stock deserves a spot in your portfolio.

Steady Revenue Growth Despite Market Shifts

Netflix's financial performance may not be flashy, but it shows consistent improvement.

The company has achieved a 12.6% annualized revenue growth rate over the past five years, with a 12.7% CAGR over the last three years.

This long-term growth is accelerating.

In full-year 2025, Netflix reported 16% revenue growth, fueled by new ventures in live events, gaming, and video podcasts.

>>> Iran Introduces Marine Insurance Scheme for Strait of Hormuz Vessels

The company also beat its Q1 2026 guidance, delivering 16% year-over-year revenue growth.

Netflix continues to raise prices without losing subscribers. The latest price hike in March will boost Q2 revenue.

Additionally, the launch of an ad-free gaming app for kids in April aims to retain younger users.

AI Investments and Profit Margins

Artificial intelligence is reshaping the film industry, and Netflix is embracing it.

In March, the company acquired filmmaking tech firm InterPositive to provide creators with AI-powered tools for movie production.

This is not Netflix's only AI move. The company began using AI effects last year to cut costs.

Co-CEO Ted Sarandos noted that AI helped production teams save money and work faster. Netflix also described generative AI as a "significant opportunity" in 2025.

>>> Mark Cuban Holds Stake in Reading International as FY25 Net Losses Shrink

Netflix's net profit margins climbed into the mid-20% range in 2025.

A major boost came in Q1 from a $2.8 billion merger termination fee after the Warner Bros Discovery acquisition fell through.

This one-time event pushed net income up 83% year over year, providing extra capital for reinvestment.

While the termination fee is non-recurring, Netflix's core business remains strong. The company's ability to grow revenue, raise prices, and invest in AI positions it for future gains.

However, competition from Disney+, Amazon Prime, and other streaming services remains fierce.

At a P/E ratio of 28, Netflix is not cheap, but its growth prospects may justify the valuation.

Investors should weigh the steady revenue growth and AI initiatives against market saturation and rising content costs.

>>> Mark Cuban Backs Live Entertainment Stocks Despite Market Challenges

For those willing to bet on a streaming veteran, Netflix could be a worthwhile addition.