We could be watching the beginning of a new Netflix (NFLX -0.79%). On the one hand, it's clear that the outsize growth we saw for most of the past decade is coming to an end. And on the other hand, with management's renewed focus on achieving financial strength, the business could be making a long-awaited turn to the positive. 

Consequently, right now, I think Netflix looks like both a growth and a value stock. Here's why it might be time to consider buying this top streaming company. 

Tremendous growth 

Between 2012 and 2022, Netflix's revenue increased at a compound annual growth rate of 24.2%. During the same time, its subscriber base expanded from 30.4 million to 230.8 million today. Any way you look at it, this is phenomenal growth. And it helps explain why the stock soared 1,140% over the past decade, despite being down 53% from its all-time high (as of this writing). This long-term performance crushes the broader market. 

Given Netflix's first-mover advantage in the streaming industry, it's not surprising that the business was able to grow so rapidly. Netflix provided a superior viewer experience at a much lower cost than cable TV. And this helped spur the cord-cutting trend toward streaming as the main source of entertainment. According to eMarketer, less than half of the roughly 130 million households in the U.S. will have a traditional cable-TV subscription by the end of 2023. 

To be clear, Netflix has faced a meaningful slowdown. After losing 1.2 million customers in the first two quarters of 2022, the business was able to add 10 million in the final six months of the year. But this was far lower than the numbers from prior years. 

However, Wall Street analysts estimate that Netflix will be able to increase its top line at an average annual pace of 10.1% between 2022 and 2027. By continuing its expansion, particularly in international markets, as well as implementing new initiatives like the promising lower-cost ad-based membership tier and paid sharing, Netflix has been pulling growth levers.

Although not likely what shareholders were accustomed to seeing over the past decade, I think the prospect of double-digit revenue gains still installs Netflix firmly as a growth stock.  

An undemanding valuation 

After what I just described, the initial reaction might be to assume that Netflix trades at a steep valuation. But with the market rout that happened in 2022, that isn't the case.

Netflix trades at a price-to-earnings (P/E) ratio of below 33 today. At first glance, this doesn't scream cheap. But based on the stock's trailing five- and 10-year average valuations, this is incredibly cheap. In fact, this P/E multiple is near the lowest levels shares have traded at in recent years. 

Unsurprisingly, because of Netflix's slowing growth, investors just aren't as excited or optimistic about the business and the stock anymore. Heightened competition, high inflation, and the possibility of a recession also weigh on the stock. But these concerns can be applied to many companies right now.  

What makes the valuation even more attractive is the fact that Netflix's profitability is set to soar in the coming years. After posting positive free cash flow (FCF) of $1.6 billion in 2022, management expects to generate $3 billion of FCF this year. And according to Wall Street consensus analyst estimates, FCF will total $9.6 billion in 2027. That's a 42.8% annualized growth rate, a far greater gain than the expectation for revenue. This signals that Netflix is well on its way to finally being a sustainably profitable and cash-producing enterprise. This is what the bulls have long been waiting for. 

As a result, Netflix could satisfy the requirements of value investors, too.