So Netflix Netflix Inc. (NFLX) missed its guidance for the second quarter, and the stock took a bit of a hit. That's the kind of thing that can make investors nervous. But according to Guggenheim analyst Michael Morris, it's not a reason to panic. In fact, he's sticking with his Buy rating.

Morris explained his thinking in a recent interview. The core of his argument is pretty simple: the stock is still cheap if you look at where the company is going over the next several years. He called it "attractively valued" based on that multi-year growth potential.

The recent drop in the share price, he suggested, has more to do with what investors were hoping for than with any fundamental problem. He pointed out that over 80% of investors were expecting Netflix to raise its margin guidance. When that didn't happen, they sold. It was a classic case of the market reacting to a disappointment against heightened expectations, not a change in the underlying business trajectory.

Morris acknowledged that some of the recent stock rally was tied to news about a deal with Warner Bros. Discovery, Inc (WBD). He gets why the guidance miss caused a pullback after that. But he stressed that the long-term story for Netflix hasn't changed. In fact, he thinks there's extra "option value" in the stock that isn't even priced in yet—potential upside from things like advertising or strategic moves that could pay off down the line.

The Long Game Looks Good

For Morris, the quarterly guidance hiccup doesn't overshadow the bigger picture. He described Netflix's latest report as a "beat and maintain"—the company beat expectations for the quarter it just finished, and it's maintaining its longer-term goals.

Those goals are what he's focused on. Netflix has previously laid out its ambitions for the next five years, and Morris says the company is still on track. We're talking about expectations for strong double-digit revenue growth, operating profit growth in the high-teens percentage range, and earnings growth of more than 20% all the way through the end of this decade.

That's the kind of compounding growth that long-term investors love. Morris believes those investors are likely to stay confident in Netflix's ability to deliver it.

New Captain, Same Ship?

There is one notable change on the horizon that could give some investors pause: co-founder Reed Hastings is stepping away from his leadership role. Morris admits that this transition might weigh on sentiment in the short term. Hastings is a legendary figure in the streaming world, and his departure marks the end of an era.

However, Morris sees reasons for stability. Leadership will continue under Ted Sarandos and Greg Peters, both seasoned executives deeply familiar with Netflix's strategy and culture. It's not like the company is bringing in an outsider to steer the ship.

Morris also highlighted Netflix's evolving strategy as a source of potential strength. The push into advertising is a big deal, and the company's experience—including its recent deal-making—has sharpened its mergers and acquisitions capabilities. He was careful to note that no major deals are expected right now, but having that capability in the toolkit adds to the company's strategic flexibility.

In early trading on Monday, Netflix shares were up a modest 0.15% at $97.45.