Netflix shares are down nearly 43% over the past year as revenue growth slows and worldwide viewing hours rose only about 2% in the first half of 2026. Revenue still rose roughly 15% to $24.8 billion, and advertising revenue of about $618 million in the second quarter jumped nearly 79.8%, though it missed consensus by 7.2%. Content amortization fell from nearly 39.2% of revenue in 2024 to about 34.4% in the first half of 2026, and management expects a 31.5% operating margin in 2026. The author argues the 2026 EPS consensus of $3.58 includes a $2.8 billion termination fee from the Warner Bros. Discovery deal; excluding its estimated $0.53 per-share after-tax effect gives about $3.05, which would make 2027 EPS growth to $3.80 about 24.6% rather than just over 6%. Netflix repurchased $4.7 billion of stock in Q2 with $27.1 billion of capacity left, and trades at about 18.5 times 2027 EPS estimates.
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