What happened

Shares of Netflix (NFLX -0.63%) fell 12.9% last month, according to data from S&P Global Market Intelligence. Investors in the leading streaming video service had their nerves rattled by comments a company executive made at a media industry conference.

So what

Speaking at the Bank of America Media, Communications, and Entertainment conference on Sept. 13, Netflix CFO Spencer Neumann attempted to address several pain points. Some of his answers left investors less than satisfied, and his reluctance to give detailed responses to other queries didn't exactly boost Wall Street's confidence, either.

  • Margin plans: Neumann was vague about Netflix's margin guidance, and did not offer specific numbers. This lack of clarity likely unsettled investors who value transparency in financial metrics. Host Jessica Reif Cohen pressed Neumann for a specific long-term target for operating margin -- which is currently at 22.2% -- but the CFO declined to supply one. "I'm not going to give you a specific number, Jessica," he said. "I don't have a specific number for you other than it's well above where it is today."
  • Hollywood strikes: While acknowledging the impact of writers' and actors' strikes on Netflix's content production and financial results, Neumann focused more on the human element and the need for partnerships. He didn't delve into the direct financial repercussions that the work stoppages were having on the company, leaving investors in the dark.
  • Sports and live content: Many investors hope that Netflix could become a major player in live content presentation and coverage of sporting events, but that doesn't seem to be in the cards. Neumann mentioned that Netflix is open to offering sports and live content, but only if it fits within its member-centric approach. The lack of a concrete plan may have contributed to investor skepticism.

This presentation took place near the closing bell on Wednesday, Sept. 13. By Thursday's market close, Netflix's stock had fallen by a total of 7.9% in two days. After that, the stock's decline continued at a slower pace through the rest of the month, largely undisturbed by any news of game-changing importance.

Now what

Netflix has given investors a lot to worry about in recent years. Yesteryear's extreme subscriber growth has been exchanged for a focus on slower but more profitable growth. An ad-supported version of the service used to be an idea management refused to even consider; now, it represents the company's strongest tool for reaching price-sensitive consumers. And the streaming market is teeming with competitors. So it makes sense that some nervous investors will reach for the "sell" button at the slightest suggestion of further challenges.

On the other hand, these concerns are already priced into Netflix stock. The stock currently trades more than 46% below the all-time high it set in November 2021, and at a reasonable valuation of 24 times forward sales projections.

In other words, this robust growth stock looks undervalued, and last month's big price drop opened the buying window a little bit wider. If you're looking for the best ways to invest in next-generation entertainment stocks, Netflix should be near the top of your list for further research.