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Boomfish Wealth Group LLC grew its holdings in Netflix, Inc. (NASDAQ:NFLX – Free Report) by 91.5% in the 3rd quarter, according to the company in its most recent Form 13F filing with the SEC. The institutional investor owned 34,547 shares of the Internet television network’s stock after acquiring an additional 16,510 shares during the quarter. Boomfish Wealth Group LLC’s holdings in Netflix were worth $2,404,000 at the end of the most recent reporting period.

Other institutional investors and hedge funds also recently added to or reduced their stakes in the company. American Capital Advisory LLC lifted its holdings in Netflix by 0.8% during the first quarter. American Capital Advisory LLC now owns 13,990 shares of the Internet television network’s stock valued at $1,345,000 after purchasing an additional 109 shares in the last quarter. CWS Financial Advisors LLC boosted its stake in Netflix by 3.2% during the first quarter. CWS Financial Advisors LLC now owns 3,612 shares of the Internet television network’s stock worth $347,000 after buying an additional 112 shares during the period. Warner Group LLC increased its position in shares of Netflix by 2.2% during the first quarter. Warner Group LLC now owns 5,230 shares of the Internet television network’s stock valued at $503,000 after acquiring an additional 114 shares during the last quarter. Financial Avengers Inc. increased its position in shares of Netflix by 9.8% during the first quarter. Financial Avengers Inc. now owns 1,290 shares of the Internet television network’s stock valued at $124,000 after acquiring an additional 115 shares during the last quarter. Finally, PAX Financial Group LLC boosted its position in shares of Netflix by 2.5% during the 1st quarter. PAX Financial Group LLC now owns 4,847 shares of the Internet television network’s stock worth $466,000 after purchasing an additional 116 shares during the period. 80.93% of the stock is currently owned by institutional investors and hedge funds.

Insider Buying and Selling at Netflix In other Netflix news, Director Richard Barton sold 720 shares of the business’s stock in a transaction dated Thursday, September 10th. The stock was sold at an average price of $75.27, for a total transaction of $54,194.40. Following the sale, the director owned 2,460 shares in the company, valued at approximately $185,164.20. The trade was a 22.64% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Theodore Sarandos sold 27,312 shares of Netflix stock in a transaction on Tuesday, August 4th. The shares were sold at an average price of $73.35, for a total value of $2,003,335.20. Following the sale, the chief executive officer directly owned 178,954 shares of the company’s stock, valued at approximately $13,126,275.90. The trade was a 13.24% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders sold 179,045 shares of company stock valued at $13,132,194. Corporate insiders own 1.24% of the company’s stock.

More Netflix News Here are the key news stories impacting Netflix this week: Positive Sentiment: Netflix reported third-quarter EPS of $0.87, ahead of the $0.82 consensus estimate, while revenue reached $12.87 billion. Operating margin rose to 34.6%, supporting the argument that the core streaming business remains highly profitable. Can Netflix Stock Hold Margin Gains as Content Spending Keeps Growing? Positive Sentiment: Longer-term bulls argue that Netflix’s profitability, systematic share repurchases, local-language content, and continued subscriber retention could create meaningful upside after the sell-off. Bill Ackman has also returned to the stock and expects annualized returns above 20%. Bill Ackman Lost $400 Million on Netflix Positive Sentiment: Ark Invest’s Cathie Wood bought 18,000 Netflix shares, signaling that some growth-oriented investors view the two-year-low valuation as an opportunity. Cathie Wood Just Bought Netflix Stock Neutral Sentiment: Netflix is reportedly planning layoffs at its Bay Area headquarters. The cuts could reduce costs, but they also raise questions about operating priorities and employee productivity. Netflix Stock Slips as Layoffs Hit Bay Area Headquarters Neutral Sentiment: Paramount Skydance’s completed merger highlights intensifying competition for scale and content across the entertainment industry, potentially increasing pressure on Netflix to sustain its content advantage. Could Skydance Be Bigger Than Disney? Negative Sentiment: Management reduced its 2026 advertising-revenue outlook to approximately $2.7 billion from about $3 billion. Softer ad growth undermines a major part of Netflix’s expansion thesis and overshadowed the earnings beat. Netflix Cut Its 2026 Ad Forecast by $300 Million Negative Sentiment: Disappointing fourth-quarter revenue guidance and decelerating growth have led investors to discount the strong quarterly results. Netflix’s reduced 2026 free-cash-flow outlook is another concern as content spending continues to rise. Netflix Has Lower FCF Guidance Negative Sentiment: Several analysts lowered their price targets or ratings after the report. One fair-value estimate fell from $92.62 to $86.24, while UBS, Guggenheim, and Needham adopted more cautious views. Netflix Stock Fair Value Falls After Cautious Q3 Analyst Revisions Negative Sentiment: Reports indicate viewing time is declining even though subscribers are staying, suggesting weaker engagement. YouTube and lower-cost streaming alternatives may also be contributing to slower revenue growth. Netflix Is Losing Viewers Analysts Set New Price Targets Several brokerages have recently issued reports on NFLX. Rosenblatt Securities set a $71.00 price target on shares of Netflix and gave the stock a “neutral” rating in a research report on Wednesday. Loop Capital dropped their target price on Netflix from $115.00 to $95.00 and set a “buy” rating on the stock in a report on Friday, July 24th. Barclays set a $65.00 price target on Netflix and gave the company an “equal weight” rating in a research note on Wednesday. TD Cowen reaffirmed a “buy” rating and set a $100.00 price objective on shares of Netflix in a research report on Wednesday. Finally, Seaport Research Partners set a $85.00 target price on Netflix in a research report on Wednesday. Three research analysts have rated the stock with a Strong Buy rating, thirty-four have issued a Buy rating, seventeen have issued a Hold rating and two have issued a Sell rating to the company’s stock. According to MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and a consensus price target of $89.59.

View Our Latest Stock Analysis on NFLX

Netflix Stock Performance Shares of NASDAQ:NFLX opened at $65.85 on Friday. The business’s 50-day simple moving average is $74.27 and its 200 day simple moving average is $79.64. Netflix, Inc. has a one year low of $64.10 and a one year high of $116.73. The company has a market cap of $270.40 billion, a P/E ratio of 22.88, a PEG ratio of 0.98 and a beta of 1.62. The company has a debt-to-equity ratio of 0.43, a quick ratio of 1.14 and a current ratio of 1.07.

Netflix (NASDAQ:NFLX – Get Free Report) last released its quarterly earnings results on Tuesday, October 20th. The Internet television network reported $0.87 earnings per share for the quarter, topping analysts’ consensus estimates of $0.82 by $0.05. Netflix had a net margin of 29.69% and a return on equity of 42.69%. The business had revenue of $12.87 billion during the quarter, compared to the consensus estimate of $12.87 billion. During the same quarter last year, the company earned $0.59 earnings per share. The business’s quarterly revenue was up 11.9% compared to the same quarter last year. On average, sell-side analysts forecast that Netflix, Inc. will post 3.59 earnings per share for the current fiscal year.

About Netflix (Free Report)

Netflix, Inc (NASDAQ:NFLX) is a global entertainment company that provides subscription-based streaming services. Its platform offers a broad selection of television series, films, documentaries, stand-up specials and other programming, including content produced by Netflix and licensed from third-party studios and creators.

The company also develops and distributes original productions under the Netflix brand and has expanded into additional entertainment offerings, including mobile and cloud-based games in select markets and live programming.

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Compass Wealth Management LLC grew its stake in Netflix, Inc. (NASDAQ:NFLX – Free Report) by 26.5% in the third quarter, according to its most recent 13F filing with the Securities & Exchange Commission. The fund owned 89,926 shares of the Internet television network’s stock after acquiring an additional 18,836 shares during the quarter. Netflix comprises approximately 1.2% of Compass Wealth Management LLC’s investment portfolio, making the stock its 25th biggest position. Compass Wealth Management LLC’s holdings in Netflix were worth $6,257,000 at the end of the most recent reporting period.

Several other institutional investors have also modified their holdings of the stock. Royal Fund Management LLC lifted its stake in shares of Netflix by 1.5% in the 3rd quarter. Royal Fund Management LLC now owns 34,593 shares of the Internet television network’s stock valued at $2,407,000 after purchasing an additional 528 shares during the last quarter. WP Advisors LLC lifted its position in Netflix by 7.3% in the third quarter. WP Advisors LLC now owns 141,341 shares of the Internet television network’s stock valued at $9,835,000 after buying an additional 9,611 shares during the last quarter. Strategic Planning Group LLC boosted its stake in Netflix by 4.1% during the third quarter. Strategic Planning Group LLC now owns 152,979 shares of the Internet television network’s stock worth $10,644,000 after buying an additional 6,082 shares during the period. Indiana Trust & Investment Management Co boosted its stake in Netflix by 120.2% during the third quarter. Indiana Trust & Investment Management Co now owns 1,145 shares of the Internet television network’s stock worth $80,000 after buying an additional 625 shares during the period. Finally, Benin Management CORP boosted its stake in Netflix by 12.9% during the third quarter. Benin Management CORP now owns 5,690 shares of the Internet television network’s stock worth $396,000 after buying an additional 650 shares during the period. Hedge funds and other institutional investors own 80.93% of the company’s stock.

Wall Street Analysts Forecast Growth A number of equities research analysts have weighed in on NFLX shares. Itau BBA Securities dropped their price target on shares of Netflix from $151.40 to $96.00 and set an “outperform” rating for the company in a research report on Wednesday, August 5th. New Street Research upped their price objective on shares of Netflix from $96.00 to $102.00 and gave the stock a “neutral” rating in a report on Friday, July 17th. Deutsche Bank Aktiengesellschaft set a $93.00 price objective on shares of Netflix in a research report on Wednesday. KGI Securities downgraded shares of Netflix from an “outperform” rating to a “neutral” rating and set a $75.00 target price for the company. in a report on Friday, July 17th. Finally, Daiwa Securities Group cut their target price on Netflix from $102.00 to $76.00 and set an “outperform” rating on the stock in a research report on Wednesday, July 22nd. Three research analysts have rated the stock with a Strong Buy rating, thirty-four have issued a Buy rating, seventeen have assigned a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat, Netflix has a consensus rating of “Moderate Buy” and a consensus price target of $89.59.

Read Our Latest Report on Netflix Key Headlines Impacting Netflix Here are the key news stories impacting Netflix this week:

Positive Sentiment: Investors are treating the sell-off as a potential buying opportunity. Netflix beat third-quarter EPS expectations, generated $12.87 billion in revenue, and increased operating income 34.6% year over year. Several analysts—including UBS, JPMorgan, Bank of America, and TD Cowen—retained positive ratings despite lowering price targets. Stock Market Today, Oct. 22: Netflix Rises as Investors Capitalize on Post-Earnings Sell-Off Positive Sentiment: Netflix’s valuation has become more attractive after the decline, with investors emphasizing rising profits, more than 300 million subscribers, pricing power, and potential long-term growth from advertising, live events, and international content. The company’s buybacks are substantial, although management appears to follow a systematic rather than opportunistic repurchase strategy. The Truth About Netflix’s Massive Stock Buybacks Neutral Sentiment: Management continues to target double-digit revenue growth and expects advertising revenue to grow more than 80% in 2026. Netflix is investing in original programming, theatrical releases, live sports, and events such as NFL games, but executives acknowledge that viewer-hour growth and content execution need to improve. Negative Sentiment: The principal pressure is Netflix’s fourth-quarter outlook: EPS guidance of $0.67 trails the $0.73 consensus, while projected revenue of $13.4 billion is below the $13.5 billion estimate. Full-year revenue guidance was also slightly reduced. ETFs in Focus as Netflix Shares Tumble Amid Q3 Earnings Beat, Guidance Cut Negative Sentiment: Netflix cut its 2026 advertising-revenue forecast from approximately $3 billion to $2.7 billion, reinforcing concerns about slower growth, delayed ad execution, weaker engagement, and competition from YouTube, TikTok, and lower-cost streaming options. Multiple analysts consequently lowered price targets, while Needham downgraded the stock to Hold. Why Netflix Stock Dropped Today Insider Activity In other Netflix news, CEO Theodore A. Sarandos sold 27,312 shares of the business’s stock in a transaction on Tuesday, August 4th. The shares were sold at an average price of $73.35, for a total value of $2,003,335.20. Following the completion of the transaction, the chief executive officer owned 178,954 shares in the company, valued at $13,126,275.90. The trade was a 13.24% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Richard N. Barton sold 720 shares of the business’s stock in a transaction on Thursday, September 10th. The stock was sold at an average price of $75.27, for a total transaction of $54,194.40. Following the completion of the transaction, the director owned 2,460 shares of the company’s stock, valued at approximately $185,164.20. This trade represents a 22.64% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 179,045 shares of company stock worth $13,132,194 over the last 90 days. Company insiders own 1.24% of the company’s stock.

Netflix Stock Up 3.1% Shares of NASDAQ:NFLX opened at $67.05 on Friday. The company has a debt-to-equity ratio of 0.43, a current ratio of 1.07 and a quick ratio of 1.14. The firm has a market capitalization of $279.19 billion, a PE ratio of 19.38, a price-to-earnings-growth ratio of 0.92 and a beta of 1.62. The firm’s 50-day moving average is $74.52 and its two-hundred day moving average is $79.74. Netflix, Inc. has a 1 year low of $64.10 and a 1 year high of $116.73.

Netflix (NASDAQ:NFLX – Get Free Report) last issued its quarterly earnings results on Tuesday, October 20th. The Internet television network reported $0.87 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.82 by $0.05. Netflix had a net margin of 29.69% and a return on equity of 42.69%. The business had revenue of $12.87 billion for the quarter, compared to analysts’ expectations of $12.87 billion. During the same quarter in the prior year, the company earned $0.59 earnings per share. The business’s quarterly revenue was up 11.9% on a year-over-year basis. Analysts predict that Netflix, Inc. will post 3.58 EPS for the current year.

Netflix Company Profile (Free Report)

Netflix, Inc (NASDAQ:NFLX) is a global entertainment company that provides subscription-based streaming services. Its platform offers a broad selection of television series, films, documentaries, stand-up specials and other programming, including content produced by Netflix and licensed from third-party studios and creators.

The company also develops and distributes original productions under the Netflix brand and has expanded into additional entertainment offerings, including mobile and cloud-based games in select markets and live programming.

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Receive News & Ratings for Netflix Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Netflix and related companies with MarketBeat.com's FREE daily email newsletter.

Billionaire investor Bill Ackman lost more than $400 million on Netflix Inc. (NASDAQ:NFLX) in 2022 after deciding its future was too difficult to predict. Four years later, he’s back, forecasting annualized investment returns above 20% despite another disappointing earnings reaction.

“We expect our go-forward IRR to be well into the 20s,” Ackman told CNBC Thursday.

From a $400 Million Loss to a ‘High-Growth Utility’Ackman’s Pershing Square sold its entire Netflix stake in April 2022, just three months after buying it. Subscriber losses and uncertainty over advertising and password-sharing plans had shaken his confidence.

“We have lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty,” he wrote to investors.

Now Ackman calls Netflix a “high-growth utility,” citing subscriber loyalty, pricing power and earnings growth he expects to remain in the high teens to 20% for years.

“They’ve won the streaming wars. I don’t know who displaces Netflix,” he said.

Ackman even welcomed this week’s results, despite the post-earnings selloff.

“We actually view the quarter very favorably,” he said.

Netflix’s third-quarter operating income climbed 37% to $4.46 billion, while subscriber cancellations declined globally and in the United States despite recent price increases.

Why Ackman Welcomes Cheaper SharesNetflix generated $2.9 billion in quarterly free cash flow and spent a record $4.8 billion repurchasing shares, its latest results showed.

Ackman believes falling share prices could benefit long-term investors by allowing Netflix to buy back more stock for the same money.

“We’ll make more money over time if the stock is cheaper in the short to intermediate term because they’re going to cancel a lot more shares as a result,” he said.

He described Netflix as trading at roughly 18 times earnings, although trailing profits include a one-time $2.8 billion payment received earlier this year following the failed Warner Bros. Discovery deal.

But Netflix’s growth is showing signs of strain. The company cut its advertising revenue forecast by $300 million to $2.7 billion, while its U.S. programming has reportedly struggled to produce major hits.

Netflix is bringing in a new content chief to turn things around, even as YouTube captures a growing share of Americans’ viewing time.

Investor and YouTube commentator Joseph Carlson pushed back on the YouTube threat in a video Wednesday.

“People do not necessarily cancel Netflix because they watch more YouTube,” Carlson said.

Ackman also said Meta Platforms Inc. (NASDAQ:META) could finance its ambitious AI expansion with additional borrowing, pointing to its $82 billion in cash and securities.

On Polymarket, traders gave Netflix a roughly 10% chance of reaching $75 by October’s end, about 12% above Thursday’s $67.05 close. The market had approximately $35,000 traded.

While prediction-market traders focus on the next few trading sessions, Ackman’s return to Netflix reflects a longer-term bet that rising profits and aggressive buybacks can deliver exceptional returns even as revenue growth slows.

Image: Shutterstock

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Netflix Subscribers Keep Paying Despite Weaker Viewing. Deutsche Bank Sees a Buying Opportunity

Summary

Despite weaker U.S. viewing trends and advertising delays, Netflix continues to grow revenue and retain subscribers, supporting a top analyst's $93 price target

Netflix NFLX continues to retain subscribers despite weaker U.S. viewing trends, giving Deutsche Bank a reason to stay positive after the streaming company's latest earnings report.

Analyst Bryan Kraft maintained a Buy rating and $93 price target, even as Netflix shares fell 5.3% in Wednesday trading after the company reduced its 2026 advertising revenue forecast to $2.7 billion from about $3 billion. Netflix attributed the reduction to delays in rolling out advertising features and integrating systems with advertisers.

Netflix's third-quarter revenue increased 11.8% year over year to $12.87 billion, while operating income rose 37% to $4.46 billion. The company said cancellations improved from a year earlier in every region, including the United States, despite subscription price increases.

International engagement offered another positive signal. Viewing hours in India climbed 24% during the quarter, with local revenue increasing about 18% after currency adjustments. Kraft believes softer U.S. viewing may reflect a weaker content lineup compared with last year rather than a lasting problem.

Netflix expects 2026 revenue of $51.1 billion, up about 13%, and plans to expand its advertising-supported subscription tier into 15 additional countries in 2027.

Netflix stock rose 3% Thursday morning.

Disclosures
I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

Click for the complete disclosure

A Louisiana congressman with a seat on the House capital markets subcommittee kept buying Netflix through nine consecutive purchases as the stock fell to a new 52-week low, drawing accusations of conflict of interest and leaving every disclosed lot underwater.

Rep. Cleo Fields (D-La.) has disclosed nine Netflix (NASDAQ:NFLX | NFLX Price Prediction) purchases since October 31, 2025, and no sales. Each disclosed buy came at a closing price no higher than the previous one.

Netflix now trades at $65.04, while the average analyst price target stands at $91.39, a gap of about 40.5%.

A gap above 40% means Wall Street still expects a recovery that the market has stopped pricing in. Shares just set a new 52-week low. The quarter beat profit expectations but came with a weaker outlook for advertising and cash flow.

Fields kept adding on the way down, and every lot he has disclosed now shows an estimated loss, as his trades show averaging down in practice, which pays off only when the underlying business thesis holds.

That thesis is under strain, and its outcome depends on whether Netflix’s ad and growth problems are temporary or structural.

Fields Kept Buying Netflix as It Fell
The first five buys were $100,001 to $250,000 each. They came between October 31 and November 20, 2025, at split-adjusted closes of $111.89, $110.01, and $105.67. That was weeks before Netflix announced its $82.7 billion Warner Bros. deal.

Two December buys of $1,001 to $15,000 followed at $103.96. Then came a $50,001 to $100,000 purchase at $87.26 in January.

His latest disclosed buy, $1,001 to $15,000 in an E*TRADE account, came on September 14 at an $80.32 close. Netflix rose about 3.8% that day to $77.40, so the dip label comes from the falling price sequence.

The combined ranges suggest roughly $553,000 to $1.4 million invested. Members get 45 days to disclose, so newer buys could exist, though none is known.

His Capital Markets Seat Drew Scrutiny
His timing drew criticism because of his position in Congress. Fields has served on the House Financial Services Subcommittee on Capital Markets and the Subcommittee on Oversight and Investigations.

Former Rep. Brian Baird (D-Wash.), one of the authors of the STOCK Act, called the purchases a “blatant conflict of interest” and said, “I can’t imagine how this is not an outrage to everyone.”

In October 2025, Fields said, “I’m going to continue to purchase stocks. It’s something I’ve done, and I encourage young people to do.”

At 63, Fields said in July that he would not seek reelection after a Supreme Court redistricting ruling, and he plans to run for a vacant Louisiana state Senate seat. His term ends January 3, 2027.

Ad Forecast Cut Drove Netflix to New Low
In the third quarter, revenue rose 12% to $12.87 billion, operating margin expanded to 34.6% from 28.2%, and diluted EPS rose to $0.87 from $0.59.

Guidance drove the selloff. The company cut its 2026 ad-revenue forecast to about $2.7 billion from roughly $3 billion because some ad products are rolling out more slowly, and it trimmed free cash flow to about $12.0 billion from $12.5 billion.

Its 26.0% fourth-quarter margin forecast includes about 120 basis points of drag from layoffs. Full-year targets include $51.1 billion in revenue and a 31.5% margin.

Shares then fell 5.31%, or $3.65, to $65.04 on about 101.4 million shares. Along the way, an intraday low of $64.10 broke the prior 12-month low of $65.08.

Fields’ Lots Sit Underwater While Analysts Stay Bullish
Estimated declines to the latest close range from 41.9% on the October 31 lot to 19.0% on the September buy. Averaging down only pays if the stock rebounds. If the business has changed, each new buy just makes a losing position bigger.

Wall Street still backs a rebound, with 52 analysts behind a consensus Buy rating and the $91.39 target. That target is one data point, since targets often trail sharp selloffs.

Netflix trades far below its $124.86 52-week high after losing about 47.5% over the past year, leaving a $270.82 billion market value. It is down 30.63% this year, while the S&P 500 is up 13.38%.

What Netflix Needs to Prove on Ads Before Investors Return
Investors betting on Netflix are counting on the ad shortfall as a timing issue. Management said ads are still growing over 80% this year, and ad levels launch in 15 new countries starting March 2027.

But the bear case gains weight if the ad levels prove harder to monetize, because layoffs lift margins only once while slower revenue growth keeps adding up. The open Warner Bros. deal adds more risk.

A forward P/E near 19x already prices in heavy doubt. Management also spent a record $4.8 billion on buybacks last quarter, which suggests it sees value at these prices.

The case for Netflix looks stronger than the case against it, because the valuation leaves room for the ad expansion to develop. Copying Fields carries its own problem, since disclosures can arrive 45 days late.

Contact [email protected] for any questions or corrections.

Netflix is making itself clear: It's a streaming-first business.

During the company's third-quarter earnings call on Tuesday, co-CEO Ted Sarandos reiterated the streaming giant's long-held stance that its content, which it spent $20 billion on last year, is meant for its subscribers and, therefore, should be delivered to customers on its streaming platform as quickly as possible.

Yet, the company is set to have 30 theatrical releases in 2027, on par with what it brought to cinemas in 2026. And while not all of these features are expected to have wide releases or long runs in theaters, Netflix is testing the waters with projects like Greta Gerwig's "Narnia: The Magician's Nephew," which will have a wide release and a 49-day exclusive theatrical window when it hits cinemas in February.

The company seems poised to carve a new path forward as it grapples with viewership stagnation and a stock slump of roughly 30% since January.

How its theatrical ambitions fit into a streaming-first strategy remains a question mark.

"Theatrical releases are a net positive for reach and streaming demand," Alicia Reese, analyst at Wedbush, wrote in a note Wednesday. "Netflix's more amenable attitude toward exclusive theatrical windows will not only facilitate better relationships with talent, but also add a new revenue stream and build interest in its streaming service. This follows the pattern we have seen with the major studios' streaming platforms over the past several years: theatrical releases don't cannibalize the streaming window, as Netflix fears."

Ahead of its Tuesday earnings report, Netflix restructured its C-suite, bringing in former Disney executive Peter Rice to take over as the company's chief content officer, ousting 10-year veteran Bela Bajaria.

Netflix also dismissed Dan Lin, the company's head of film, according to a person familiar with the matter who spoke on the condition of anonymity to discuss internal changes. That came just days after it laid off roughly 1,000 employees including Lin's right hand Doug Belgrad as well as Sheroum Kim, the director of independent film, according to various media reports. It's unclear who Netflix will tap to take over Lin's position.

The company aims to restore quality to the brand and utilize Rice's expertise in talent relations to lure big names in an increasingly competitive market.

Still, Netflix executives seemed to downplay the change in leadership during the company's earnings call.

"Our business and our business flywheel are working," Sarandos told investors during the company's earnings call. "There is no need for a fundamental shift in the strategy. We do need better execution in the U.S. ... It's just not growing as fast as it could or as fast as we'd like."

Sarandos said the streamer had "some really solid doubles and triples this year," but suggested the company needs more "home runs."

In an emblematic moment during Tuesday's call, Sarandos highlighted a deal with Disney, struck in October, to bring the Ice Age films and others to the streaming service, and gave a nod to that company's CEO, Josh D'Amaro.

"We already are seeing some of those benefits from the Ice Age movies. All five of them hit our top 10. That's really exciting," the Netflix co-CEO said. "And by the way, yes, Netflix just plugged a Disney movie on our earnings call. You're welcome, Josh."

Netflix's content strategyIn a bid to capture consumer attention and broaden its subscriber funnel, Netflix has spent years diversifying its offerings to include video games, live sports and quick-turn documentaries on buzzy cultural moments.

But more recently, it's lacked some of the water-cooler-type hits like "Stranger Things," "Bridgerton" and "Squid Game" that previously boosted subscriptions and viewership numbers.

"We know there's some investor concern about our view hours growth," Netflix said in its shareholder letter Tuesday. "Engagement — which encompasses quantity, quality and variety of viewing — remains healthy."

And yet with Netflix stating plainly that it needs new avenues for growth — and against the backdrop of a foiled deal to buy the Warner Bros. film studio — investors and onlookers are once again looking at the theatrical business.

"I think there's a place for the theatrical for Netflix," Matthew Condon, equity research analyst at Citizens, told CNBC. "Especially, as the competition for time and attention just continues to increase."

"If they really want to build stickier fan bases around some of their [intellectual property], I think theatrical could be a good avenue for them to do that," Condon said. "That's one area that Netflix has historically not been all that strong in, is building like really, really strong IP. And I think building fan bases around theatrical releases and things of that nature can help with that and then also can help them get top tier talent."

Netflix is no stranger to luring in big Hollywood directors. It's worked with the likes of Rian Johnson, Martin Scorsese, Alfonso Cuarón, Bong Joon Ho, Spike Lee and Guillermo del Toro. However, none of these directors' Netflix films received a wide theatrical release or a long run in theaters.

Sarandos admitted earlier this month that the company has lost talent because it would not guarantee wide theatrical releases.

Most notably, the creators and lead producer behind its hit "Stranger Things" have all jumped ship in the last year. Matt and Ross Duffer signed a four-year exclusive deal with Skydance — the new home of the same Warner Bros. film studio that Netflix nearly bought — while Shawn Levy joined the ranks of Disney to direct "Star Wars: Starfighter."

Going to the moviesSarandos said Tuesday the company's strategy is about "specialty theatrical releasing," in which each film gets its own bespoke release. In some cases, Netflix plays the film in theaters for the minimum requirement to be eligible for awards. Others appear for weekend stints as one-off events, like in the case of its "KPop Demon Hunters" smash that ran in theaters for just two days.

Gerwig's "Narnia" adaptation is among those chosen few to get longer theatrical runs and a wider reach, along with an animated film called "Charlie vs. the Chocolate Factory."

"Both films have big global IP and big global fandom, so we're very excited about how they'll play out next year," Sarandos said.

In another sign of its evolution into theaters, Netflix has said it will report box office results for films that have longer theatrical windows. Those readouts are standard for major studios, regardless of release or windowing, but the move marks a new level of disclosure for the streamer.

Incoming content head Rice could be the missing piece for Netflix in a new theatrical model.

The executive has a wealth of experience in television and film. Since 2023 he has produced films like "Saturday Night" and "28 Years Later." He's currently developing a movie adaptation of the video game "Elden Ring."

But right now, Netflix doesn't have the infrastructure for a full theatrical commitment.

"Going into theatrical isn't quite as easy as I think sometimes folks make it sound," Steven Cahall, stock analyst at Wells Fargo, told CNBC. "You have to negotiate with movie theaters, and find spots for your films."

Cahall noted that sending the occasional film to theaters, especially with a limited release, "maybe isn't so hard, but there is a muscle of theatrical distribution ... You need a team of people, and you need a pipeline of content that's intended for theatrical release, and you need a marketing department around it."

That's where buying Warner Bros. Discovery's studio assets would have come in. In the absence of that acquisition, it's not clear how, or how quickly, Netflix can bulk up its own operations.

Plus, it's previously balked at the marketing costs that come with bringing films to the cinema, which can total hundreds of millions of dollars per film. Despite a hefty content budget, Netflix has long prioritized quantity and seemingly endless choice for its subscribers over individual big-budget projects.

A shift to a multi-pronged strategy that feeds both streaming and cinemas would require Netflix to more closely mimic the companies it disrupted in the first place.

"So that becomes more of an existential question for Netflix: Is it time to become a media conglomerate rather than being a pure play streaming company?" Wells Fargo's Cahall said. "'Do we want to become a media conglomerate?'"

Diversify Advisory Services LLC grew its stake in Netflix, Inc. (NASDAQ:NFLX – Free Report) by 14.8% during the third quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The institutional investor owned 203,913 shares of the Internet television network’s stock after purchasing an additional 26,365 shares during the period. Diversify Advisory Services LLC’s holdings in Netflix were worth $14,806,000 as of its most recent filing with the Securities and Exchange Commission.

Several other hedge funds and other institutional investors also recently made changes to their positions in the stock. Merkkuri Wealth Advisors LLC bought a new position in Netflix in the 1st quarter valued at approximately $31,000. Bayban grew its stake in shares of Netflix by 400.0% during the first quarter. Bayban now owns 350 shares of the Internet television network’s stock worth $34,000 after buying an additional 280 shares during the last quarter. Clal Insurance Enterprises Holdings Ltd bought a new stake in shares of Netflix during the second quarter worth $26,000. Compound Global Advisors LLC bought a new stake in shares of Netflix during the second quarter worth $29,000. Finally, Burnham & Co LLC acquired a new position in shares of Netflix during the second quarter worth $29,000. 80.93% of the stock is owned by institutional investors.

Insiders Place Their Bets In other Netflix news, CEO Gregory K. Peters sold 27,312 shares of the firm’s stock in a transaction that occurred on Thursday, August 6th. The shares were sold at an average price of $73.54, for a total transaction of $2,008,524.48. Following the completion of the transaction, the chief executive officer owned 120,931 shares in the company, valued at approximately $8,893,265.74. This trade represents a 18.42% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Theodore A. Sarandos sold 27,312 shares of the business’s stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $73.35, for a total transaction of $2,003,335.20. Following the completion of the transaction, the chief executive officer owned 178,954 shares in the company, valued at $13,126,275.90. This trade represents a 13.24% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 179,045 shares of company stock valued at $13,132,194 over the last three months. Insiders own 1.24% of the company’s stock.

Netflix Stock Down 1.7% Shares of NFLX opened at $68.69 on Wednesday. The stock’s 50-day moving average price is $74.92 and its two-hundred day moving average price is $80.20. Netflix, Inc. has a 12 month low of $65.08 and a 12 month high of $124.86. The company has a market capitalization of $286.02 billion, a PE ratio of 21.62, a PEG ratio of 0.99 and a beta of 1.62. The company has a current ratio of 1.14, a quick ratio of 1.14 and a debt-to-equity ratio of 0.39. Netflix (NASDAQ:NFLX – Get Free Report) last issued its quarterly earnings results on Tuesday, October 20th. The Internet television network reported $0.87 earnings per share for the quarter, beating the consensus estimate of $0.82 by $0.05. The company had revenue of $12.87 billion during the quarter, compared to analysts’ expectations of $12.87 billion. Netflix had a return on equity of 40.02% and a net margin of 28.22%. The business’s quarterly revenue was up 11.9% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.59 earnings per share. On average, analysts anticipate that Netflix, Inc. will post 3.59 EPS for the current year.

Netflix News Summary Here are the key news stories impacting Netflix this week:

Positive Sentiment: Netflix exceeded third-quarter profit expectations, reporting diluted EPS of $0.87 versus the $0.82 consensus estimate. Revenue reached $12.87 billion, operating income rose 37% year over year to $4.46 billion, and operating margin expanded to 34.6%. Netflix Q3 earnings beat Positive Sentiment: Management cited pricing power, controlled churn and strong profitability, while Netflix repurchased approximately $4.8 billion of stock during the quarter. These factors support earnings per share and shareholder returns. Netflix Q3 financial results Positive Sentiment: Some analysts view the sharp decline in the stock and its valuation as creating an attractive entry point if management can restore viewership growth and improve content execution. Netflix is cheap again Neutral Sentiment: Netflix is cutting roughly 1,000 jobs and reorganizing its creative leadership, including changes involving film and content executives. Co-CEO Greg Peters described the layoffs as a difficult tradeoff intended to redirect investment toward longer-term growth, but the restructuring may create near-term execution risk. Netflix layoffs and long-term growth Negative Sentiment: The main pressure on NFLX is its fourth-quarter outlook: revenue is projected at approximately $13.4 billion, below Wall Street expectations, with operating margin expected to fall to 26% as restructuring costs weigh on results. Netflix weak fourth-quarter forecast Negative Sentiment: Netflix reduced its 2026 advertising-revenue forecast to approximately $2.7 billion from $3 billion because advertising-product rollouts are progressing more slowly than expected. The shortfall undermines a key growth narrative. Netflix cuts advertising forecast Negative Sentiment: Revenue growth is expected to slow for a fourth consecutive quarter, while stagnant viewership—particularly in the United States and Canada—and intensifying competition are raising concerns about Netflix’s ability to keep audiences engaged. Netflix viewership and competition concerns Negative Sentiment: The company also lowered its 2026 free-cash-flow outlook to about $12 billion from $12.5 billion, adding to investor concerns that forward momentum is weakening despite the quarterly earnings beat. Analysts Set New Price Targets A number of brokerages have recently commented on NFLX. KeyCorp dropped their price target on Netflix from $92.00 to $85.00 and set an “overweight” rating for the company in a research note on Tuesday, October 13th. Rosenblatt Securities reissued a “neutral” rating and set a $75.00 price objective on shares of Netflix in a report on Friday, October 16th. BMO Capital Markets restated an “outperform” rating and set a $125.00 price objective (down from $135.00) on shares of Netflix in a research report on Friday. Bank of America lowered their target price on Netflix from $125.00 to $105.00 and set a “buy” rating for the company in a report on Friday, July 17th. Finally, Loop Capital lowered their target price on Netflix from $115.00 to $95.00 and set a “buy” rating for the company in a report on Friday, July 24th. Three investment analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating, sixteen have given a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat, the stock has an average rating of “Moderate Buy” and an average target price of $93.38.

Get Our Latest Research Report on Netflix

Netflix Profile (Free Report)

Netflix, Inc (NASDAQ:NFLX) is a global entertainment company that provides subscription-based streaming services. Its platform offers a broad selection of television series, films, documentaries, stand-up specials and other programming, including content produced by Netflix and licensed from third-party studios and creators.

The company also develops and distributes original productions under the Netflix brand and has expanded into additional entertainment offerings, including mobile and cloud-based games in select markets and live programming.

Featured Articles Five stocks we like better than Netflix Aurora Rejects Curaleaf’s Higher Bid, But the Takeover Fight Isn’t Over Centrus Energy Is Building a Nuclear Fuel Powerhouse—Why Is Its Stock Struggling? Halliburton Gains Traction: Multiyear Upcycle Ahead Meta Platforms’ AI Comeback Faces an Earnings Test—And a $10 Billion Charge Want to see what other hedge funds are holding NFLX? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Netflix, Inc. (NASDAQ:NFLX – Free Report).

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2026 has been a rough year for Netflix (NFLX -1.66%). The streaming stock is down 31% year-to-date, including a 6% slide following its earnings report on Tuesday.

Netflix's sell-off isn't a mystery. The company has struggled with viewer engagement, as viewing hours were up just 2% through the first half of the year, and it has lost viewing share to its rivals, including YouTube, the market leader. According to data from Nielsen, Netflix's viewer share fell from 8.8% to 7.8% in the year ending July.

However, while Netflix's growth is slowing, it's delivering solid results. Revenue rose 11.8% to $12.9 billion in the third quarter, and earnings per share improved from $0.59 to $0.87, though that was partly due to lower content spending because of timing.

More importantly, based on a comparison with its streaming peers, Netflix is outgrowing them and trades at a relatively attractive price.

Image source: Netflix.

Netflix vs. the competitionThere aren't any other pure-play streaming stocks on the market, but that should be a reminder of its competitive advantage as the company is outgrowing rivals like Walt Disney Co, Skydance, and Comcast. The chart below shows recent revenue growth rates for those stocks, and includes Warner Bros Discovery before its acquisition by Paramount Skydance.

NFLX Revenue (Quarterly YoY Growth) data by YCharts

As you can see, all of Netflix's competitors are growing more slowly than it is, and all three of them have legacy businesses in cable networks, theatrical films, and broadband internet in the case of Comcast.

That gives Netflix an advantage as it can reinvest all of its profits into its streaming business and doesn't have to absorb the headwinds from the declining legacy businesses.

You would think that a company that was bigger than its rivals and outgrowing them would be trading at a higher multiple, but that's not the case, as the chart below shows.

NFLX PE Ratio data by YCharts

The newly formed Skydance is not unprofitable and is unlikely to be anytime soon, given its roughly $80 billion in debt. Disney has a similar P/E ratio to Netflix, while Comcast trades in value-stock range, which is due to expectations that its revenue will fall due to the shrinking cable business and challenges in its broadband division.

NFLX Netflix$68.69-$1.16 (-1.66%)

NASDAQ · As of 4:00 PM ET 10/20/26

What it means for NetflixDespite the malaise around Netflix stock, the numbers make the stock look attractive. It's still delivering double-digit growth; it's outperforming its peer group, and it trades at a discount to the S&P 500.

Netflix isn't done producing hits. The entertainment business is notoriously cyclical, and every studio has its misses. Management stood by its content on the latest earnings report, saying that member response to its 2026 price changes shows that its engagement remains healthy and that the company continues to deliver strong value for its members.

The stock seems to be priced as if Netflix's growth will continue to slow, and its revenue is currently benefiting from a price hike in March, which will roll off by the second quarter of next year.

For now, analysts expect double-digit revenue growth to continue into 2027, forecasting 11.2% growth to $56.9 billion.

If the company can deliver on that forecast, the stock looks like a winner at the current price.

Netflix is oversold. This is still an industry leader with double-digit revenue growth, a clear advantage over its legacy media peers, and unmatched global reach. The stock has gone through similar downturns before, and it's always bounced back. It's a good bet that it will follow that pattern again.

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Netflix's Ted Sarandos said the streamer needs to step up its US content. Noam Galai/Getty Images Netflix needs to make better shows and movies in the US, its co-CEO said after its third-quarter earnings report.

"We do need better execution in the US," co-CEO Ted Sarandos said on the company's Q3 earnings call on Tuesday.

Netflix's global content — including Latin America, Europe, the Middle East, Africa, and Asia — "is largely working," Sarandos told investors.

"The US is also working. It's just not growing as fast as it could, or as fast as we'd like," Sarandos said.

Netflix's biggest market is the US and Canada, which made up about 44% of its revenue this quarter at $5.6 billion. Next are Europe and the Middle East, followed by Latin America and the Asia-Pacific region.

Why Tesla is at a tipping point

Sarandos said the US "had some really solid doubles and triples this year" but added that "the other territories count on some of those titles being home runs, so that they'll travel around the world."

Netflix announced last week that it will be replacing content chief Bela Bajaria, who had overseen the streamer's movies and shows since 2023, with former Disney and Fox executive Peter Rice.

The streaming giant is also moving on from film chief Dan Lin. Rice will oversee Netflix's movies until the company fills his role.

Co-CEO Greg Peters said on the earnings call that Netflix's goal is to take its content slate "from very good to great."

Besides subbing out content execs, Netflix also cut roughly 1,000 workers in what was its biggest round of staff reductions since 2022.

Netflix shares entered Tuesday's earnings report down about 44% in the last 12 months. The stock fell 6% in after-hours trading following the company's report, which showed a third consecutive quarter of slowing revenue growth.

Wall Street has grown concerned about Netflix's engagement growth, especially as the paid streaming leader competes with free streamers like YouTube.

"There is a lot to be excited about, but I know that we could do better," Sarandos said.

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James Faris is a media correspondent in New York City.He covers the business of media & entertainment, specifically the streaming, TV, and AI strategies of Hollywood giants like Disney, Skydance (Paramount-WBD), and Netflix. He previously wrote about the stock market, the economy, and real estate.James joined Business Insider after graduating magna cum laude from James Madison University.Email James at [email protected] and follow him on LinkedIn.

Media Netflix

Netflix svými hospodářskými výsledky za třetí čtvrtletí sice překonal očekávání Wall Street, na druhé straně ale firma naznačila, že zpomalení tempa růstu tržeb bude pokračovat i ve zbytku letošního roku. Takový výhled tak může posílit obavy investorů o další směřování největší světové streamovací platformy. Akcie v bezprostřední reakci v aftermarketu vykazují pokles téměř o pět procent.

Ve třetím čtvrtletí dosáhl Netflix zisku na akcii ve výši 87 centů (+49 % y/y), zatímco analytici očekávali 82 centů. Na tržbách společnost vygenerovala 12,87 miliardy dolarů, což bylo jednak meziročně o 12 procent více a jednak v souladu s očekáváním.

Ovšem na čtvrté čtvrtletí firma odhaduje tržby ve výši 13,44 mld. USD, což už je pod konsenzem trhu, jenž je 13,51 mld. USD. Tempo růstu tržeb navíc už několik čtvrtletí postupně zpomaluje: z 17,6 procenta ve 4Q25 na očekávaných 11,5 procenta ve 4Q26.
Pokud se výhled pro letošní závěrečné čtvrtletí skutečně naplní, bude se jednat už o čtvrtý kvartál zpomalujícího růstu tržeb v řadě, podotkla agentura Bloomberg.

Společnost uvedla, že za slabším růstem stojí reklamní byznys, který by měl letos přinést zhruba o 300 milionů dolarů méně, než Netflix původně očekával.

Spoluvýkonný ředitel Netflixu Ted Sarandos se nechal minulý měsíc slyšet, že firma neroste tak rychle, jak by si přál, a že pracuje na urychlení tohoto tempa. Během posledního týdne pak Sarandos výrazně zasáhl do vedení společnosti ve snaze řešit podle něj zhoršující se kvalitu obsahu. Netflix propustil šéfku obsahu Belu Bajaria a šéfa filmové divize Dana Lina jen několik dní poté, co oznámil snížení počtu zaměstnanců o šest procent, tedy přibližně o tisíc lidí. Naposledy společnost přistoupila k tak rozsáhlým škrtům v roce 2022, kdy zaznamenala první čtvrtletní úbytek předplatitelů za více než deset let, připomněl Bloomberg.

Sarandos a jeho kolega ve funkci CEO Greg Peters se snaží investorům ukázat optimistickou budoucnost firmy, zároveň však připouštějí, že současný vývoj neodpovídá představám vedení ani akcionářů. Netflix si každopádně i tak nadále drží pozici jasného lídra streamovacího trhu s více než 325 miliony předplatitelů, což podle firmy představuje téměř miliardu diváků. Rovněž generuje více sledovanosti než jakákoliv jiná hollywoodská streamovací služba.

Jenže filmová studia obvykle nepřistupují k rozsáhlým personálním změnám v době, kdy se jim daří. Netflix už několik měsíců nepřišel s velkým kulturním fenoménem v podobě seriálu či filmu a zároveň se mu nedaří přilákat diváky k novým titulům ani dalším řadám zavedených sérií. Počet cen Emmy, které firma získala, navíc letos klesl na nejnižší úroveň za posledních deset let.

„V prostředí intenzivní konkurence a exploze obsahu bojujícího o pozornost spotřebitelů jsou strategická jasnost a bezchybná exekuce zásadní,“ uvedla společnost v dopise akcionářům. Přestože se jí daří naplňovat své priority, „stále vidí prostor pro zlepšení“.

Netflix, dlouhá léta miláček Wall Street, čelí rostoucím pochybnostem investorů od chvíle, kdy neuspěl ve snaze převzít streamovací a studiová aktiva společnosti Warner Bros. Discovery. Od té doby se firmě jen obtížně daří přesvědčit investory, že má životaschopnou strategii růstu i bez velké akvizice. Akcie společnosti od začátku roku odepsaly zhruba 25 procent hodnoty a za posledních dvanáct měsíců jsou v minusu o více než 40 procent.

Analytici i investoři opakovaně upozorňují na stagnující zapojení uživatelů. Podíl Netflixu na sledovanosti televizního obsahu v USA činí podle společnosti Nielsen 7,8 procenta, tedy výrazně méně než přibližně 14 procent u YouTube. Diváci Netflixu navíc v první polovině roku sledovali pouze o dvě procenta více obsahu než před rokem.

Listen to the audio version of this article (generated by AI).

Blockbuster’s lesson, revisited… when AI kneecaps a moat… two tests for every stock you own… Eric Fry’s “panic early” rule
As I write on Monday morning, the AI trade is trying to claw its way back after last week’s brutal selloff.

But whether this is a fool’s gold rally or the start of a real bull run into the end of the year, one thing is true: AI itself is quietly eroding the business models of some of the market’s best-known companies. It’s critical that you and I recognize how this is happening and prepare our portfolios – not just for a week of volatility but for permanent existential risk.

For an example that’s playing out right now, let’s rewind 26 years…

In September 2000, the founders of a money-losing DVD-by-mail startup flew to Dallas to pitch the CEO of the biggest name in home video on an acquisition.

The startup was Netflix (NFLX). The CEO was Blockbuster’s John Antioco. And the asking price was $50 million.

Netflix co-founder Marc Randolph, who showed up in shorts, a tie-dyed T-shirt and flip-flops, later described the moment the number landed. As he put it in his memoir, “John Antioco was struggling not to laugh.”

Blockbuster turned down the deal, and 10 years later, it filed for bankruptcy.

It’s become the business world’s favorite cautionary tale about a dominant company that didn’t see what was coming. But today, the story is worth retelling for an ironic reason…

Netflix may be staring down its own Blockbuster moment – though for a very different reason.

The streaming giant stumbles
Last Wednesday, Netflix management told employees it will lay off roughly 6% of its workforce, or about 1,000 people. The cuts land mostly on the product, tech, legal and HR teams.

A few weeks ago, co-CEO Ted Sarandos told a Bloomberg conference that the company was “not growing as fast as I want.” As one illustration of this, viewing time grew just 2% in the first half of the year.

Wall Street has noticed. In June 2025, NFLX stock hit a record high. But as I write on Monday, it trades at less than $70 – down nearly half since that high-water mark.

But this selloff is less about an upstart company challenging the industry king, and more about an upstart technology challenging the entire model.

Netflix sees AI coming. In fact, it’s embracing it. Last year, Netflix confirmed that its Argentine sci-fi series The Eternaut featured the first generative AI footage ever to appear in the final cut of a Netflix original.

The scene showed a building collapsing in Buenos Aires. Sarandos told analysts the sequence was finished 10 times faster than with traditional visual effects. He added that, without AI, the cost “would just not have been feasible for a show in that budget.”

But look at the flip side of that – the same tool that lets Netflix make an expensive scene cheaply lets everyone make it cheaply. And that dovetails into the problem…

For two decades, Netflix’s moat rested on a simple fact: great video is expensive and slow to make, and Netflix could outspend nearly everyone. Blockbuster’s downfall was a failure of vision. Netflix faces something more difficult: a technology that erodes its moat, no matter how clearly management sees the danger coming.

“Nothing is happening at all” –until it is
Tom Yeung, lead analyst for our global macro expert Eric Fry in Fry’s Investment Report, has been tracking this threat since March.

Back then, Netflix traded near $100, and investors weren’t worried about its long-term profits. After all, AI video was still mostly a punchline.

Here’s how Tom described AI video quality at the time:

A recently generated viral clip of Jackie Chan fighting Jet Li had more bugs than a picnic in July.

Anyone watching it carefully will notice the kung fu actors reaching straight through objects, growing phantom limbs, and magically teleporting between camera shots.

Then the situation changed, gradually at first and then all at once.

Back to Tom:

In short, people saw the technology the same way parents often view their kids – with progress so gradual that it’s tempting to conclude that nothing is happening at all.

But every once in a while, there comes an epiphany of how far things have come. For AI-generated video, that realization happened over the past six months after a stream of new developments began making headlines.

Two of those developments came from China. First, in April, regulators approved the world’s first theatrical release of a feature-length AI film by a major mainstream movie studio. That film, Sanxingdui: Future Memories, opens in Chinese theaters this Friday.

Then in August, a Chinese company began releasing episodes of an AI-generated TV show, The Sequel to Journey to the West. Tom notes that it racked up 280 million views across its first five episodes and ranked No. 1 among some provincial channels.

The economics behind all this are startling…

According to Chinese state broadcaster CCTV, the cost of producing one minute of an AI short drama fell from 5,000 yuan (about $700) to just a few hundred yuan in the first half of this year.

One Chinese director said a wedding scene that would have cost him about $9,000 to shoot cost about $210 with AI.

Circling back to Netflix, here’s Tom with the fallout:

Shares of Netflix have since fallen below $70, and one analyst even dared put a “Sell” rating on this formerly blue-chip stock – its first negative review since the start of the year.

After all, Netflix is now facing some real competition.

Credit to Tom – Wall Street’s first bearish call (last month) arrived after the stock had already fallen about 30% from Tom’s March warning.

In fairness to Netflix
Before we write Netflix’s obituary, a real bull case remains.

Netflix has more than 300 million subscribers, and its advertising revenue is on track to roughly double this year, to about $3 billion. Meanwhile, management has guided to $51 billion to $51.4 billion in 2026 revenue.

Plus, live sports and events, which AI can’t fake, are a growing part of the mix. And AI may cut Netflix’s own production costs as much as anyone’s.

These tailwinds mean investors trying to understand whether AI will hurt or help Netflix should ask two questions…

What is Netflix’s core asset as a company? And does AI make that asset more or less scarce?

If it’s the content, Netflix’s dominance looks shaky as a wave of cheap content is coming. But if it’s the subscriber relationship and global distribution network, the moat may hold.

Notably, CNBC reports that Netflix’s biggest threat has been YouTube, which is a distribution platform rather than a studio. YouTube doesn’t need to make the best shows. It wins by being the viewing channel people turn to by habit.

That’s a hint that in a world of abundant video, the scarce asset is the platform where viewers spend their time – and with more than 300 million subscribers, Netflix owns one of the biggest. The catch is that Netflix is competing with YouTube for those same hours – and YouTube is free to watch.

Now, beyond Netflix, the question of “what’s actually scarce?” is critical to ask as you evaluate your portfolio – after all, it’s how we spot small cracks in our own holdings before they turn into massive fissures.

Two ways AI breaks a moat
Netflix’s challenge – that something which once made it valuable is becoming abundant – isn’t unique. Plenty of good businesses will face it in the years ahead.

This points to two tests we can run on every stock we own…

The scarcity test.

Pricing power follows scarcity. When AI turns a scarce thing into an abundant thing, the pricing power leaks away, even from well-run companies.

The logic applies to any business whose core product is expensive, skilled human output. That includes tutoring and homework help, stock photography, call-center labor and ad production.

So, does AI make the products of the companies you own more or less scarce?

The friction test.

In our Sept. 29 Digest, we looked at how AI agents like Meta Platforms Inc.’s (META) Muse could commoditize businesses built on customer inertia. These include banks paying 0.1% on checking accounts, insurers counting on lazy renewals, and wireless carriers charging loyal customers more than new ones.

Scarcity and friction are two different mechanisms with one shared outcome: margins that looked permanent can turn out to be temporary.

So, does AI make it easier for customers to find better or cheaper alternatives to the products and services offered by the companies you own?

If the answer is “yes” to either of these two tests, be careful.

When to act: Eric Fry’s rule
The problem for investors is that by the time disruption is obvious, it’s usually priced in. Tom issued his warning in March. Wall Street’s first sell call arrived in September – 30% lower.

Eric – our macro investing expert – has a rule for exactly this kind of situation. Now, to be clear, he wasn’t writing about Netflix. He was writing about risk in the broader market. But the point remains:

Panic early. That’s the only near-certain defense against adversity in the financial markets, and in life generally…

Once you catch a whiff of smoke from a distant wildfire, you don’t hang around until embers are landing on your roof…

Successful panicking begins by saying “no” to obvious risks. Only then can you calmly examine and select opportunities that offer a more favorable route to wealth-building.

Panicking early doesn’t mean dumping every stock that AI touches. It does mean assessing the situation soberly, then making calm, deliberate choices.

For more on the stocks that Eric believes are worth holding today, click here to learn about joining him and Tom in Fry’s Investment Report.

Coming full circle
This brings us back to Netflix, which reports earnings tomorrow.

If you own the stock, this will be a live test of what Netflix’s core asset really is. Watch engagement trends, content spending, and anything management says about generative AI in production.

Strong engagement and a growing ad business would suggest the subscriber relationship is the scarce asset that holds. Another quarter of flat viewing would point the other way.

Either way, let’s not miss the wider point…

Netflix beat Blockbuster by making video easy to get. The next disruption is making video easy to make. Unlike Blockbuster, Netflix sees it coming. What’s still unclear is whether that’s enough.

Now, before we wrap up today, a quick related note…

Want to trade Netflix’s earnings tomorrow but aren’t sure about which way it will break?
If you’re tempted to trade Netflix’s earnings, you don’t necessarily have to correctly predict which way the stock will move to make money.

I learned that from veteran trader Jonathan Rose, editor of Advanced Notice. Sometimes, instead of betting on the direction a stock will move after an earnings report, Jonathan buys both calls and puts – positioning to profit from a big move, whichever way it goes.

Under the right circumstances, it can be very lucrative…

For example, this approach paid off for Jonathan’s subscribers last week with FMC Corp. (FMC). Shares plunged more than 36% after a dramatic guidance cut, and Jonathan’s subscribers took profits on the put side for what he called “more than 200% on our total position.”

For more on how Jonathan finds and structures trades like this – plus his entire trading approach to the markets – you can still catch a free replay of his $10K to $100K Challenge from last week. We’re taking the replay down later this week, so click here to watch it while you can.

We’ll keep tracking Netflix here in the Digest.

Have a good evening,

Jeff Remsburg

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Dan Lin, with Ava DuVernay, is Netflix's latest exec cut.

Kate Green/Getty Images for Netflix

Film head Dan Lin is out at Netflix, the latest exec to be ousted in the wake of the streamer's biggest layoff since 2022.

Lin was hired as film chair in 2024 with a mandate to bring greater cost discipline and variety to Netflix's films, which had focused on big-budget output under his predecessor, Scott Stuber. Lin cut big upfront paychecks to actors, reduced staff, and reorganized his department. He oversaw a slate that included Oscar-winning "KPop Demon Hunters," "Happy Gilmore 2," and "Frankenstein."

Lin's exit is the latest big shocker at Netflix. Also out in recent days was chief content officer Bela Bajaria, who was replaced by Hollywood veteran Peter Rice, a former exec at Disney and Fox.

Rice will oversee film until a new head is announced, Netflix said in a statement confirming Lin's departure.

Last week, Netflix laid off 1,000 employees, or about 6% of global head count. That was the streamer's largest cull since 2022, when the company lost subscribers for the first time in more than a decade.

The streaming giant has been hampered by slowing engagement growth and a stock price that has declined more than 40% over the past year. The streamer is contending with the rise of free, ad-supported streaming led by YouTube and the popularity of social video. In recent months, Netflix has turned to podcasters and creators to bulk up its library.

Netflix is set to report third-quarter earnings after the bell on Tuesday.

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Lucia Moses covers the media and entertainment business, with a focus on how creators build businesses, how media companies intersect with creators, and how marketers adopt entertainment tools. She's broken stories about MrBeast's ambitions, Google's movie initiative, and Netflix's push into podcasts.She previously reported on media and managed teams at Digiday and Adweek.

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Netflix just posted a rare one-week bounce after a brutal slide from its highs, and with earnings on the horizon, analysts are split on whether the rebound holds or breaks down from here.

Netflix (NASDAQ:NFLX | NFLX Price Prediction) shares have climbed 4.1% over the past week to $72.56, with earnings expected on October 20. The 24/7 Wall St. price target for Netflix is $81.87 over the next 12 months, implying 12.8% upside.

Our framework gives the stock a buy with high confidence.

24/7 Wall St. Price Target Summary

Metric
Value

Current Price
$72.56

24/7 Wall St. Price Target
$81.87

Upside/Downside
12.8%

Recommendation
BUY

Confidence Level
90%

Revenue is still growing at a double-digit pace. Advertising is on track to roughly double to about $3B in 2026. And Netflix has $27.1B of buyback capacity left. At 19x forward earnings, investors pay a modest multiple for that combination.

A One-Week Bounce Follows a Bruising Year
The recent strength comes off a deep hole. Netflix is down 9.66% over the past month and 22.61% year to date, while the S&P 500 has gained 12.96%. Shares sit 41.9% below the 52-week high of $124.86 and 11.5% above the low of $65.08.

In July, second-quarter EPS of $0.80 exceeded the $0.7883 estimate, while revenue of $12.56B rose 13.37% but came in slightly under expectations. Management guided third-quarter EPS to $0.82. Sentiment heading into the report is mixed.

Huber Research downgraded the stock to underweight, citing a reported 5% headcount reduction and engagement concerns. KeyBanc kept its overweight rating but cut its target.

Why Bulls See $119.94
Management estimates Netflix is under 45% penetrated across roughly 800 million addressable households and captures about 7% of a $670 billion revenue market. Pricing power, live events like the expanded NFL deal and a gap between ad-tier and standard-plan revenue per member all leave room for growth.

Netflix also bought back $4.7B of stock in the second quarter, its largest buyback quarter ever. Of the analysts tracked, 35 rate the stock a buy or strong buy and only 1 rates it a sell. If ads and pricing outperform, our bull scenario reaches $119.94.

Engagement Doubts Could Cap the Rebound
Viewing hours grew just 2% in the first half of 2026. Second-quarter free cash flow fell 32.73% to $1.53B.

Much of that decline results from higher cash taxes tied to the Warner Bros. Discovery (NASDAQ:WBD) termination fee, and full-year free cash flow guidance remains near $12.5B. A $1B debt maturity and speculation about a large acquisition add risk. Our bear scenario lands at $74.88.

Netflix Sits Between Disney and Spotify on Valuation
Disney (NYSE:DIS) is Netflix’s most direct streaming rival through Disney+ and Hulu. It trades at 14x forward earnings, but its quarterly revenue grew only 6.8%, about half of Netflix’s pace.

Spotify (NYSE:SPOT) shows what investors pay for subscription-plus-advertising growth. Spotify trades at 29x forward earnings on 13.9% revenue growth, nearly matching Netflix’s 13.4%, with a far thinner operating margin.

The 24/7 Wall St. price target implies roughly 24x forward EPS. That sits well below Spotify’s multiple, so we view the target as reasonable and arguably conservative.

Company
Forward P/E
Revenue Growth (YoY)
Operating Margin

Netflix
19
13.4%
33.4%

Disney
14
6.8%
19.3%

Spotify
29
13.9%
13.7%

Margins and Buybacks Drive Our Model’s Outlook
The 24/7 Wall St. price target of $81.87 takes a buy rating and 90% confidence. What makes the call for me is industry-leading margins coupled with aggressive buybacks.

The October report will show whether ad revenue is tracking toward the $3B goal. Slowing engagement or a large acquisition would weaken the case. Our model sees more upside than downside at the current price.

Here is where our model projects Netflix could trade further out if current growth trends and market conditions hold.

Year
24/7 Wall St. Price Target

2026
$74.08

2027
$81.87

2028
$89.84

2029
$97.13

2030
$109.99

The forecast relies on Netflix continuing to follow its current strategy. Faster ad monetization could drove results above this path, while weaker engagement or a costly acquisition could pull them below it.

Contact [email protected] for any questions or corrections.

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Netflix is replacing content chief Bela Bajaria with former Disney TV executive Peter Rice.

Gonzalo Marroquin/Getty Images for Netflix; Beata Zawrzel/NurPhoto via Getty Images; Dimitrios Kambouris/Getty Images

Netflix has hired a new content chief after a stock slump and struggles to grow its viewership.

Peter Rice, a former Fox and Disney executive, will oversee Netflix's movies and shows starting on October 26, the company announced on Thursday.

Rice will replace Bela Bajaria, who's leaving the company after almost a decade, Netflix said. Bajaria took the top content job in 2023 and memorably described the ideal Netflix show as a "gourmet cheeseburger."

The exec shake-up came a day after the streaming giant laid off about 1,000 employees on Wednesday, its biggest round of layoffs in four years.

Netflix has had a tough year. Shares are down nearly 40% in the past 12 months as investors increasingly worry about slower viewership growth and the company's long-term direction. Netflix's attempt to buy Warner Bros. — which was ultimately stymied by Paramount — soured the Wall Street narrative about the company's future.

Rice was previously the head of Disney's TV arm, where he ran Hulu and networks like ABC, Disney Channel, and FX. He was fired from the Mouse House in 2022 by former Disney CEO Bob Chapek.

Bajaria "led enormous changes at Netflix," co-CEO Ted Sarandos said in a statement, crediting her for helping the streamer broaden its content mix to live events and sports.

This is a developing story and will be updated.

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James Faris

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James Faris is a media correspondent in New York City.He covers the business of media & entertainment, specifically the streaming, TV, and AI strategies of Hollywood giants like Disney, Skydance (Paramount-WBD), and Netflix. He previously wrote about the stock market, the economy, and real estate.James joined Business Insider after graduating magna cum laude from James Madison University.Email James at [email protected] and follow him on LinkedIn.

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In this photo illustration, the Netflix logo appears on a cell phone with a streaming site catalog page in the background in Creteil, France, on December 10, 2025. (Photo by Samuel Boivin/NurPhoto via Getty Images)

Samuel Boivin/NurPhoto via Getty Images

The king of streaming is shrinking parts of its kingdom.

Netflix is cutting roughly 1,000 employees, or about 6% of its staff, in the streamer's largest round of layoffs since 2022. Product, tech, and HR teams are among the areas being hit.

It comes amid a dark stretch for Netflix's stock, which is down almost 42% over the past year and nearly 25% in 2026. BI's Jame Faris broke down five key reasons why Netflix has been having such a tough time.

But the layoffs didn't immediately ease investors' concerns. Netflix's stock price barely moved, finishing the day up 0.16%. BI's Peter Kafka does a good job of explaining why Netflix's problems won't be solved by job cuts.

Netflix reports earnings on Tuesday, but the streamer's pain point isn't a secret: engagement.

With roughly 325 million paid subscribers, Netflix's reach is still massive. But investors have been dogging Netflix about how long all those people are engaging with its shows.

Things came to a head this summer during Netflix's second-quarter earnings. Following lukewarm results, Netflix said it wasn't going to release audience numbers as often.

Holding back information from investors isn't typically a great sign. But there's an argument that focusing on the performance of Netflix's new, shiny shows is missing the point. The streamer's success often comes from older shows' massive tails.

That still doesn't address the biggest risk to Netflix and other streamers. From TikTok and Instagram to YouTube and free TV, people have a lot of options.

Netflix's job cuts don't mean spending cuts.

One of the biggest areas they've leaned into this year is video podcasts, negotiating a deal with Spotify for popular shows like "The Bill Simmons Podcast" and "The Rewatchables."

Podcast listeners are a loyal audience, returning regularly to consume shows. Bonus points if you can pull them away from a rival like YouTube, where these shows often live. (Granted, it's still early days, so there's no concrete proof this is happening just yet.)

You know who else stays engaged? Sports fans. That's also a space Netflix has aggressively pursued. Early signs were good. Last year Netflix said deals with the NFL and a Jake Paul fight drove surges in daily sign-ups.

But live sports don't come cheap. Netflix has five NFL games this season as part of an expansion of its deal with the league, which started in 2024. The current partnership extends through the 2029 season. That timing coincides with an opt-out clause in the league's much-larger deal with CBS and Fox.

Netflix isn't putting all its sports eggs in the NFL's basket. Earlier this week, it bought the exclusive rights to air the 2030 World Cup in Spain and Andorra. Terms of the deal weren't disclosed, but the 104-game package likely didn't come cheap.

But then again, chasing engagement never is.

Dan DeFrancesco

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In the age of AI, some big tech stocks have been all but forgotten. Netflix (NFLX -0.54%) is one of those stocks, as it doesn't have the AI angle that many others do. That shouldn't distract investors from how well Netflix has done over the years. However, 2026 has been an atrocious year for Netflix, as it has lost about 25% of its value since the year started.

Netflix is known to make some dramatic movements after earnings, and its next results come out on Oct. 20. So, is Netflix a buy before then? Or should investors steer clear? 

Image source: Getty Images.

Netflix doesn't have explosive growth compared to AI companies Part of the reason for Netflix's lackluster stock performance has to do with how it stacks up versus alternative investments. If you're looking for a big tech stock right now, Netflix is being compared to several companies that are growing revenue above a 20% year-over-year pace, and in some cases it's far faster.

The problem is that Netflix just doesn't compare, as its second-quarter revenue growth was 13.4%. It's not going to get any better in the third quarter, as its revenue growth is projected to be about 11.7%. This is a notable deceleration, as Netflix's revenue growth trend has been declining recently.

NFLX Revenue (Quarterly YOY Growth) data by YCharts. YOY = year-over-year.

Wall Street analysts aren't any more bullish on the future. They estimate that Netflix's 2026 total revenue growth will be 13.3%, and that 2027's will be 11.2%. That's an OK growth rate for the maturity of Netflix's business, but why would you invest in Netflix when you can buy a company that is growing at a much faster rate?

There are two good reasons.

Netflix doesn't have cash flow issues The problem with some of the AI investments is that they're spending hundreds of billions of dollars on AI infrastructure, and there's no guarantee that there will be a tangible return on investments for those assets. This could be a huge issue, or it could be nothing, depending on what the final state of AI profitability and spending looks like. Netflix isn't doing that, and it's producing strong free cash flow.

NFLX Free Cash Flow data by YCharts.

Another reason why Netflix may be a solid investment is that it doesn't have a premium valuation. In fact, it trades for the same price tag as the S&P 500, as it trades for 19.6 times forward earnings.

NFLX PE Ratio (Forward) data by YCharts. PE = price-to-earnings.

I think this valuation is about perfect for Netflix, as it's growing at a slightly-faster-than-market pace and is in a pretty strong position to continue growing its revenue at a double-digit pace for the foreseeable future. With not much change on the horizon, I don't foresee any large movements following its Oct. 20 earnings report, unless a major unexpected story breaks.

So, is Netflix worth buying at these prices? I'm not sure. Many AI investments trade for only a slightly higher price tag than Netflix does right now, and are growing at a far faster pace. That could lead to far better returns over the next five years than Netflix projects to deliver.

Premium Feature

Moneyball Superscore

80/100

Today's Change

(

-0.54

%) $

-0.38

Current Price

$

70.08

If your goal is to beat the market, then I'm not sure investing in Netflix is the best move. It's becoming a market-average stock with not a whole lot left to differentiate itself. Unless you're looking for a stock that's not influenced by AI, I think investors can do far better than buying Netflix stock in terms of multi-year investment returns.

Netflix NFLX said it secured the rights to broadcast the 2030 World Cup in Spain, which is co-hosting the tournament, and Andorra. It's the company's first broadcast of a major men's international tournament in Spain, where national channel TVE aired the 2026 edition. Netflix didn't disclose financial terms. Netflix shares rose 0.71% as of 10:00 a.m. ET.

The deal reaches beyond Netflix's paying subscribers. One game per matchday will be free to watch in Spain, and Netflix will offer a national free-to-air channel carrying a package that includes all of Spain's games, both semifinals and the final. It hasn't named the channel. Spain won this year's World Cup and will co-host the 2030 edition with Portugal and Morocco.

The rights extend a Netflix push into sports. The current lineup already includes the NFL, MLB, WWE, boxing and MMA. Netflix also holds U.S. and Canadian rights to the 2027 and 2031 Women's World Cups. It reports third-quarter results on October 20.

SummaryNetflix faces significant price declines, underperforming the S&P 500 and its peers year-to-date, with a 25% YTD drop and 50% decline over 15 months.Despite consistent growth in net income and free cash flow, NFLX's forward P/E ratio has fallen below 20, reflecting diminished growth expectations and analyst downgrades.Tax loss selling in November poses a near-term headwind, as NFLX is a prime candidate due to its underperformance amid a strong market.I recommend a HOLD rating: maintain positions through the October 20 earnings call, as further downside may present long-term opportunities post-tax loss season. Wachiwit/iStock Editorial via Getty Images

Netflix (NFLX) will be reporting quarterly earnings on October 20, 2026, after the close of the regular market session. Earnings per share revisions over the last 90 days have been unfavorable with a 2-to-1 ratio

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Netflix Inc. (NASDAQ:NFLX) shares are in the spotlight Monday, with earnings on deck, advertising and revenue growth in focus, recent analyst activity and a technical setup showing the stock trying to stabilize under its 20-day average.

Earnings Preview & HistoryNetflix is scheduled to report third-quarter earnings on Oct. 20 after the market closes. Analysts estimate earnings per share of 82 cents along with revenue of $12.88 billion. For the prior quarter, Netflix reported earnings per share of 80 cents, beating the consensus estimate of 79 cents. The company also posted revenue of $12.56 billion, missing the consensus estimate of $12.59 billion.

What to Watch: Revenue Growth, Advertising and MarginsInvestors will be closely tracking revenue growth against Netflix’s third-quarter guidance of about $12.86 billion, or roughly 12% growth, after second-quarter growth slowed to 11% on an FX-neutral basis. Advertising will also be in focus, with S&P Global estimating second-quarter ad revenue at $618 million, up almost 80% from a year earlier but below expectations. Management’s operating margin guidance of 33.2% and its outlook for the rest of the year, including content spending that is expected to rise about 10% in 2026, should offer additional signals.

Analyst Consensus & Recent Actions The stock carries a Buy rating with an average price forecast of $89.30. Recent analyst moves include:

Morgan Stanley: Overweight (Lowers Target to $80.00) (Oct. 8) Barclays: Equal-Weight (Lowers Target to $70.00) (Oct. 7) TD Cowen: Buy (Maintains Target to $100.00) (Oct. 5) Netflix Tries to Stabilize Under Its 20-Day AverageFrom a longer-term trend view, Netflix is still in a downtrend: the stock is trading 14.6% below its 200-day SMA ($83.45) and 42.33% lower over the past 12 months. It’s also trading 5.4% below its 50-day SMA ($75.33), keeping rallies vulnerable to selling pressure near overhead averages.

Near term, price is trying to stabilize just under the 20-day SMA ($71.66) and 20-day EMA ($71.49), which is often where "make-or-break" decisions happen for swing traders. If the stock can reclaim and hold above those short-term measures, it can shift the conversation from "bounce" to "base."

Momentum is improving on the MACD: it’s above its signal line and the histogram is positive, which suggests downside pressure is easing versus the prior downswing. In plain terms, when MACD is above its signal line, it often means the recent selling wave is losing control even if the bigger trend hasn’t fully turned.

Key levels are tight right now, which can amplify moves if either side breaks.

Key Resistance: $82.50 — a nearby ceiling that lines up with an area where rebounds can stall well below the 200-day average Key Support: $70.50 — a close-by floor near the current price zone where buyers have recently been willing to defend Read Next

Netflix Shares Edge HigherNFLX Price Action: At the time of publication, Netflix shares are trading 1.37% higher at $71.26, according to data from Benzinga Pro.

Image via Shutterstock

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

A drone view shows the Netflix logo on one of the company's buildings in the Hollywood neighborhood in Los Angeles, California, U.S., January 20, 2026. REUTERS/Daniel Cole Purchase Licensing Rights, opens new tab

Oct 9 (Reuters) - Netflix (NFLX.O), opens new tab is planning to cut about 5% of ​its workforce, with an announcement ‌expected as early as next week, Puck News reported on Friday, ​citing people familiar with ​the matter.

Netflix declined to comment ⁠on the report.

Sign up here.

The streaming ​giant's last major round of layoffs ​came in 2022, when the company cut hundreds of jobs amid slowing ​growth and subscriber losses

Netflix ​had about 16,000 full-time employees at the ‌end ⁠of last year

The company is navigating an increasingly competitive streaming market, as media companies ​consolidate and ​YouTube ⁠captures a growing share of viewership and ​advertising spending

Netflix has been ​expanding ⁠beyond its subscription business, investing in advertising, live programming and ⁠gaming ​to diversify its ​revenue sources

Reporting by Harshita Mary Varghese in ​Bengaluru; Editing by Jonathan Ananda

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Netflix shares have dropped 26% this year even as revenue keeps climbing, and a largely overlooked segment of its business could be the catalyst that catches investors off guard.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Our 24/7 Wall St. price target for Netflix (NASDAQ:NFLX | NFLX Price Prediction) is $89.74. That means 30.64% upside from the latest close of $68.69. Our model rates its confidence as high.

Metric Value Current Price $68.69 24/7 Wall St. Price Target $89.74 Upside/Downside 30.64% Model Signal Bullish Confidence Level High Netflix’s business keeps growing despite market pressure. Advertising should roughly double to about $3 billion in 2026. Live events and games add newer revenue streams. Investors appear to be pricing in a slowdown the reported numbers have yet to show.

Shares Slide 26% in 2026 as Revenue Keeps Climbing NFLX is down 1.89% over the past week, 11.86% over the past month and 26.44% year to date. It trades about 45% below its 52-week high of $124.86 and roughly 5.5% above its low of $65.08.

Q2 revenue rose 13.4% to $12.56 billion, slightly missing the $12.58 billion estimate. EPS of $0.80 beat consensus of $0.7883, and operating margin reached 33.4%.

Earlier this year, Netflix walked away from its Warner Bros. deal and collected a $2.80 billion termination fee. A rival’s merger with Warner Bros. has now closed, and Barron’s says Netflix comes out of that as the better stock (Barron’s). Netflix put its free cash into buybacks instead, buying back $4.7B of stock in Q2, its largest buyback quarter ever.

How Our Model Arrives at $89.74 The 24/7 Wall St. price target combines standard valuation metrics with factor-based adjustments. It considers a trailing P/E of 21 on TTM EPS of $3.18, a forward P/E of 19, and the analyst consensus target of $92.84. That consensus comes from 28 Buy, 7 Strong Buy, 15 Hold and 1 Sell ratings.

Advertising Could Power a Run to $106 Ad revenue exceeded $1.50 billion in 2025. The advertiser count has rose 70% to more than 4,000, and the ad tier accounts for over 60% of sign-ups in ad markets. Management called the narrowing pricing gap between the ad tier and the standard plan “near-term under-realized revenue growth.”

Live programming takes 5% of the content budget, yet it produced six out of top 10 new-member sign-up days over five years. On games, monthly active players for cloud titles have grow 11x, inside a market of roughly $150 billion in consumer spending.

If Netflix reaches the high-end 2027 EPS estimate of $4.09 and the stock gets a 26x multiple, shares would be worth $106.34, about 55% upside.

What Could Keep Netflix Stuck Below $70 Q2 free cash flow fell 32.73%, and content amortization grew faster than revenue. Netflix has $1 billion of debt to refinance, along with FX exposure and competition from Walt Disney (NYSE:DIS), Amazon (NASDAQ:AMZN) and YouTube.

Much of the cash flow drop came from higher cash taxes tied to the termination fee. Full-year free cash flow guidance held at about $12.5 billion. If earnings come in at the low 2027 estimate of $3.48 and the stock trades at 17x, it would be worth $59.16, about 13.9% downside.

Netflix Trades Between Disney’s Discount and a Peer’s Premium Company Forward P/E Quarterly Revenue Growth (YoY) Netflix 19 13.4% Disney 14 6.8% Roku (NASDAQ:ROKU) 39 21.9% Disney trades at a cheaper 14x forward earnings, but its quarterly earnings fell 48.3%, so Netflix’s premium looks gets. Roku commands 39x forward earnings on revenue growth of 21.9%. The 24/7 Wall St. price target at roughly 24x falls between those two.

Netflix Price Prediction 2026-2030 My 24/7 Wall St. price target remains at $89.74 with high confidence. Advertising is the key variable for the outlook. Investors exploring the stock can track whether ad revenue reaches about $3 billion and whether margins hold near guidance.

For 2026, our model applies today’s multiple to the 2026 consensus EPS of $3.5836. From 2028 forward, it assumes 10% annual EPS growth at a steady 24x multiple.

Year 24/7 Wall St. Price Target 2026 $76.08 2027 $89.74 2028 $98.71 2029 $108.59 2030 $119.44 These projections assume Netflix executes on its current strategy. Faster ad monetization could push results higher, while grow content costs could push them lower.

Contact [email protected] for any questions or corrections.

Key Takeaways Netflix's revenue growth is slowing, with third-quarter growth expected to reach just 11.7%.Rising live-programming and content costs are pressuring margins, while free cash flow fell to $1.5 billion.NFLX trades at premium valuation as Disney, Amazon and Apple intensify competition for viewers and ad dollars. Netflix (NFLX - Free Report) shares have plunged 26.8% year to date, underperforming the Zacks Broadcast Radio and Television industry’s decline of 9.3% and the Zacks Consumer Discretionary sector’s return of 25.8%.

The selloff is about more than weak sentiment. Revenue growth is slowing, content and live-programming costs are rising, and the stock trades at a premium in a crowded streaming market. Together, these suggest investors should stay away from the stock in the near term, even though its long-term franchise remains intact.

NFLX’s YTD Price Performance
Image Source: Zacks Investment Research

Slowing Revenue Growth Clouds NFLX's Near-Term OutlookNetflix's growth engine is slowing. Second-quarter 2026 revenues rose 13.4% year over year to $12.56 billion. The growth rate was down from 16.2% growth in the first quarter and 17.6% in the fourth quarter of 2025. The slowdown was most visible in UCAN, the company's largest region, where revenue growth fell to 10% from 14% in the previous quarter, reflecting only a partial-quarter impact of the recent price increase. EMEA growth also moderated to 14% from 17%. For the third quarter, Netflix expects revenues of $12.86 billion, implying growth of 11.7%, the slowest pace in recent quarters.

Engagement trends offer limited comfort. View hours grew just 2% year over year in the first half of 2026 to more than 97 billion hours. Netflix will also publish its What We Watched report only once a year from 2027, which reduces visibility into engagement. Membership growth and pricing remain the main revenue drivers, but repeated price hikes could test consumer tolerance. The company has also begun re-testing free trials for non-rejoining new members in several markets, a sign that winning new members may require more effort.

Rising Content Costs Pressure Margins and Cash FlowNetflix's push into live programming is raising costs. The company expects live programming to account for just over 5% of 2026 content spend but only about 1% of view hours. Content amortization is projected to rise roughly 10% in 2026, with cash content spend at about 1.1 times amortization. Second-quarter operating margin contracted to 33.4% from 34.1% in the year-ago quarter. Capital expenditure jumped to $414.8 million in the first half of 2026 from $284.2 million a year ago. Free cash flow declined to $1.5 billion from $2.3 billion, partly due to higher cash tax payments linked to the Warner Bros. termination fee.

On the positive side, Netflix narrowed its 2026 revenue forecast to $51-$51.4 billion, indicating 13-14% growth. It continues to target an operating margin of 31.5% compared with 29.5% in 2025. For the third quarter, operating margin is projected at 33.2%, with diluted earnings of 82 cents per share. Advertising revenues are expected to roughly double to about $3 billion in 2026, while free cash flow is projected at approximately $12.5 billion.

The Zacks Consensus Estimate for NFLX's 2026 earnings is pegged at $3.59 per share, which has remained unchanged over the past 30 days. This indicates a 41.9% increase from the previous year. However, gross debt of $14.4 billion warrants monitoring, including $1 billion maturing later this year that Netflix plans to refinance.

Content Pipeline Strong, But CostlyNetflix's content slate for the rest of 2026 and 2027 remains robust. In late September, the company announced that it will become the new home of WWE in Japan. Korean mystery-horror series Dead-End Job premieres on Oct. 30. Italian series ChiaroScuro and Taiwanese medical drama Miracles of the ER debut on Nov. 11 and Nov. 12, respectively. Netflix also expanded the cast of its live-action Solo Leveling series and confirmed second seasons of Wave Makers and Lock Upp: Sach Ya Sazaa. Live events remain a key draw. These include NFL games on Thanksgiving Eve and Christmas, a final-week game in early 2027, the Tyson Fury vs. Anthony Joshua fight and the Women's World Cup. Yet these investments add to cost pressure and may take time to drive faster growth.

Premium Valuation and Stiff Competition Warrant CautionNetflix's valuation remains elevated, with the stock trading at a forward 12-month price/sales ratio of 5.13X versus the industry's 3.52X. NFLX carries a Value Score of D. This premium leaves little room for error amid slowing growth, making the stock unattractive at current levels.

Competition is also intensifying. Disney (DIS - Free Report) is bundling its streaming, Hulu and ESPN offerings to retain subscribers. Disney's vast franchise library and theme-park ecosystem also strengthen Disney's pricing power and brand loyalty. Amazon (AMZN - Free Report) offers Prime Video as part of its broader Prime membership, with Amazon expanding its ad-supported reach and Amazon investing heavily in live sports rights. Apple (AAPL - Free Report) continues to build its streaming service through prestige originals. Apple leverages its device ecosystem and Apple's deep balance sheet to fund premium content and sports. These deep-pocketed rivals compete aggressively for viewers, talent and advertising dollars, which limits Netflix's pricing flexibility and steadily pressures its content costs over time.

NFLX’s Valuation
Image Source: Zacks Investment Research

ConclusionNetflix's healthy margins, fast-growing advertising business and strong content pipeline support its long-term prospects. However, decelerating revenue growth, rising live and content costs, and a premium valuation amid stiff competition limit near-term upside. Until growth reaccelerates and cost pressures ease, investors should stay away from this streaming giant for now. NFLX currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

SummaryNetflix is rated Buy with a $74 fair value and $82 12-month target, reflecting margin expansion and resilient cash flow despite slower engagement growth.Current market pessimism over NFLX's growth and margins is overdone; my model assumes a 40% peak operating margin versus the market's implied 36%.Ad revenue growth, disciplined content spending, and improved licensing terms underpin margin expansion, while competitive threats appear muted near-term.Key risks include falling viewing hours, large acquisitions, rising rates, and currency headwinds, but the current valuation offers a favorable risk/reward. JasonDoiy/iStock Unreleased via Getty Images

Ted Sarandos put Netflix's slowdown plainly this week: "Overall, we're not growing as fast as I want us to,” as he was speaking at Bloomberg's Screentime conference, after engagement grew just 2% in the 1H. Wells

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Sigma Lithium Corp (TSX-V:SGML, NASDAQ:SGML, ASX:SAU) said on Thursday it still expects to deliver 330,000 tonnes of lithium oxide concentrate in fiscal 2027, even as it temporarily suspended mining and industrial production in Brazil. 

The company halted operations on September 30 after a 15-day delay by the Federal Court of Appeals in reviewing its emergency motion for suspensive relief. It will postpone by three months its 12-month guidance of 240,000 tonnes. 

Sigma will keep its commercial and recycling operations running, including the recycling of 100% of its dry stacked tailings and sales of high-purity lithium fines. The company expects those activities to generate cash flow and self-fund it during the suspension. 

The case stems from a lawsuit filed by the NGO Ngolo seeking to suspend the company's environmental licences. Sigma said its Grota do Cirilo complex sits outside the Quilombo and the legal distance of environmental impact set by Brazilian law. It said the community's houses are about 11 km from the Barreiro Pit and 8 to 9 km from the Xuxa Pits. 

Sigma said its licences were issued between May 2019 and April 2023, before the community's RTID notices were published in November 2023. It described the licences as vested rights protected under Brazilian law. 

Should the appeals court rule against it, Sigma said it will pursue a further appeal in the superior federal courts. The company noted that Brazil's general election runoff concludes on October 25 and said a decision could be delayed. 

Sigma said it has helped create 19,000 direct and indirect jobs, benefiting about 80,000 people across 12 municipalities in the Vale do Jequitinhonha. Its programs include microcredit for more than 2,000 women entrepreneurs, 1,400 rainwater reservoirs for small farmers, drinking water access for its neighbouring community, and school projects serving about 776 children. 

Netflix (NFLX -1.76%) will report its third-quarter numbers after the market closes on Tuesday, Oct. 20. The past four times the streaming giant reported, its stock dropped the next trading day -- about 10% after its October 2025 update, 2% in January, 10% in April, and 7% in July.

Compounded, those four sessions alone cut about a quarter off the stock's value.

As I write, shares sit near $70. They're down 25% in 2026 and 44% below the 52-week high of $124.86 they hit last October. The stock has also fallen about 13% since the end of August, weeks before Netflix says anything about its third quarter.

Does a stock that's already lost so much still have expectations left to reset?

Image source: Netflix.

A streak of letdownsThe October 2025 drop was about margins. Revenue grew 17% year over year, in line with the company's forecast. But a charge of around $619 million linked to a dispute with Brazilian tax authorities pushed the operating margin down to 28%, far below the 31.5% management had guided for.

January's report was mainly about the year ahead. Netflix edged past its own fourth-quarter targets. But its 2026 forecast called for revenue growth of 12% to 14%, a step down from 16% in 2025. Its 31.5% operating margin target for 2026 also had around $275 million in acquisition-related costs built into it. And viewing hours from July through December grew just 2% from a year earlier, even as the company topped 325 million paid memberships.

April brought a strong first quarter, with revenue up 16% year over year and operating income up 18%. But the stock had gained around 26% between the January and April reports, and management's second-quarter forecast called for revenue growth to slow to 13%.

It also guided for the operating margin to drop to 32.6% from 34.1% a year before, as growth in content costs hit its peak for the year.

July's second-quarter results were in line with guidance. But the third-quarter forecast called for 12% growth, and Netflix narrowed its full-year revenue range, lowering the top end to $51.4 billion from $51.7 billion. It also said it would release its viewing-hours report once a year rather than twice.

The forecast did the damageJust one of the four reported quarters was meaningfully below Netflix's own forecast. And that miss came from a charge the company said covered tax periods going back to 2022.

Showing how steadily growth has slowed, Netflix's forecast for next-quarter revenue growth has fallen at each of the past three reports -- 15% in January, 13% in April, and 12% in July.

Put another way, each of these reports told investors that growth was still decelerating. I think that, more than any one quarter's results, is what the stock has been repricing.

Management's full-year profit outlook hasn't budged, though. Netflix still expects its 2026 operating margin to hit 31.5%, two points above 2025's 29.5%, and it says that should boost operating income by over 20% this year.

What does Netflix need to show on Oct. 20?The company's own third-quarter forecast is the obvious bar. It calls for revenue of around $12.9 billion, up 12% year over year, and an operating margin of 33.2% against 28.2% a year ago.

That margin jump could look better than it is. The year-ago quarter included the Brazilian tax charge, which Netflix said lowered its operating margin by over 5 percentage points. Take it out, and the forecast is about flat with last year's underlying margin, or slightly below it.

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The bigger test on Oct. 20 is likely the fourth-quarter forecast. If the third quarter hits its target, Netflix's narrowed full-year range leaves room for fourth-quarter revenue growth as low as around 11%. A forecast near that end might be another step down, and the stock fell after each of the last three.

Is there still room for expectations to reset? Some, I think.

At around $70, the stock trades at about 18 times earnings, using the average analyst estimate for Netflix's 2027 profits. That price no longer assumes a return to the 18% growth Netflix posted in late 2025. But it arguably still assumes growth settles around 12% as profits keep rising, and a weaker fourth-quarter forecast may test that.

In the end four straight post-earnings drops have taken a lot of optimism out of Netflix's valuation. Still, the pattern has held all year. What the company says about the next quarter has counted more than what it just reported, and I'd want to see that fourth-quarter forecast before buying shares.