News about Netflix

Netflix shares are down more than 25% this year ahead of third-quarter results after the bell on Tuesday, closing Friday near $70 versus $93.76 at the end of 2025, amid concerns about waning viewership, YouTube's dominance in watch time and more live sports moving to rival services. Last week Netflix cut 6% of its workforce, about 1,000 employees, its largest reduction since 2022, and named former Disney executive Peter Rice as chief content officer, replacing Bela Bajaria. Analysts expect EPS of $0.82 and revenue of $12.88 billion, up about 12% from a year earlier and in line with the company's own forecast, and five firms cut price targets in October. KeyBanc wants more content investment, product changes, expense cuts and a possible dividend, while Yahoo Finance's Brian Sozzi urged management not to 'read off the script' on the call.

Netflix (NFLX) reports third-quarter results after the bell on Tuesday, with the stock down more than 25% this year and closing Friday near $70, versus $93.76 at the end of 2025. Investors are worried about slowing viewership, competition from YouTube, and live sports moving to Amazon Prime Video and HBO Max. Last week Netflix cut about 6% of its workforce (roughly 1,000 employees) and named Peter Rice its new chief content officer, and five firms lowered price targets in October. Analysts expect EPS of $0.82 on revenue of $12.88 billion, up about 12% from a year earlier, in line with Netflix's own forecast. KeyBanc's Justin Patterson wants more content investment, product changes, expense cuts and a possible first-ever dividend.

The author, who has followed Netflix (NFLX) for 24 years, notes the stock has fallen more than 40% over the past year after a long run of gains. Netflix's trailing revenue is now over $48 billion at a record net margin, compared with $153 million in revenue when it went public in 2002. The stock trades at under 20 times this year's projected earnings, under 19 times next year's and 15 times the year after, and guidance calls for 11.7% third-quarter revenue growth. The author argues the valuation looks compelling for a premium business with pricing flexibility and that the current pullback is milder than the 2011 Qwikster and 2022 sell-offs. Results are due after the market closes on Wednesday, which could change the valuation math.

Netflix (NFLX) shares have fallen 41.4% over the past twelve months, while the S&P 500 returned 16.2%, even as management plans for content spending to grow more slowly than sales. Management guided to full-year 2026 sales growth of 13% to 14% and expects content expense to rise about 10%. The operating margin reached 29.7% over the twelve months to June 2026, though most of the gain came by June 2025. Reuters reported on July 16, 2026 that the 12% revenue growth forecast for fiscal Q3 fell short of Wall Street targets, down from 13.4% in fiscal Q2. Operating profit rose about 17% to $14.4 billion over the twelve months to June 2026, slightly faster than revenue growth of 16.0%.

Netflix is scheduled to report third-quarter 2026 results on Oct. 20, with guidance for revenue of $12.86 billion (about 12% growth) and adjusted EPS of 82 cents. Advertising is expected to be the key growth driver, as the company targets roughly $3 billion in 2026 ad revenue, about double the 2025 level. Operating margin is projected at 33.2%, up from 28.2% a year earlier. However, live programming accounts for about 5% of content spend but only about 1% of view hours, and first-half view hours grew just 2%. The full-year outlook calls for revenue of $51–$51.4 billion and a 31.5% operating margin, though currency volatility and content timing remain risks.

Netflix shares ended the fourth quarter higher in 17 of the past 24 years, with a median gain of about 12%, but the writer argues the reaction to the October earnings report matters more than this history. Since 2004, the stock has made 14 one-day moves of 10% or more after that report, and in 13 of those years it closed the quarter in the same direction; last year shares fell 10% and finished the quarter down about 22%. Revenue growth has slowed each quarter, from 18% in late 2025 to 13% in April–June 2026, and management forecasts 12% for the third quarter. The stock, at roughly $72, is 42% below its 52-week high of $124.86 and trades near 19 times analysts' 2027 earnings estimates. The writer says the fourth-quarter forecast, which implies growth of about 11% to 14%, will matter more than the third-quarter results reported on Oct. 20.