Netflix reported third-quarter revenue up 12% to $12.9 billion, a record 34.6% operating margin and $2.88 billion in free cash flow, yet its shares are down roughly 50% from their highs. The drop reflects worries over viewing: the company reported no growth in watch hours, and third-party data show its US TV viewing share stuck around 8% while YouTube pushes toward 15%. Several content executives have been let go and a rare round of layoffs carried out, with CEO Ted Sarandos reportedly frustrated by the lack of new hit shows. Netflix is broadening its offering with sports such as NFL games, live events, reality TV, podcasts and shorter series to compete with TikTok and YouTube. The author argues that a P/E of 19, one of the company's lowest valuations in years, makes buybacks more attractive at lower share prices.
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