Track market-moving stories before they get noisy

Prediction market Kalshi sent Netflix a cease-and-desist letter on Friday demanding that the streaming service take down the trailer for an upcoming documentary. In the letter, Kalshi claimed the trailer is “defamatory” and contains “both fabricated documents and false and misleading statements.”

“Instadocs: The Prediction Games” is a documentary about the rise of prediction markets. According to Netflix, the film — part of the streamer’s “Instadoc” series of fast-turnaround documentaries  — features interviews with both Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour.

The trailer, however, focuses on a recent party in Las Vegas, where men who have “made millions of dollars on prediction markets, probably eight figures, just over the course of the World Cup” have gathered to watch the World Cup final. One of the guests declares, “I like betting on Kalshi,” while another shows off an apparent $5,000 bet on their phone.

However, Kalshi is currently banned from operating in Nevada due to a court order. In its cease-and-desist letter, Kalshi said the bet shown on the phone is actually a screenshot of a bet made on May 16, 2025 — long before the ban. But the company argued that in the trailer, Netflix “misled its millions of customers into believing this individual was able to successfully trade sport event contracts in Nevada on July 19, 2026.”

In its letter, Kalshi also said that it recently spoke to a Netflix employee who “agreed not to feature the receipt in the documentary when it is released” on Sunday, July 26.

“However — despite Kalshi demonstrating to this employee that the claims in the video were demonstrably false — Netflix inexplicably refused to remove the receipt from the trailer currently circulating on the homepage of the Netflix app,” the company said.

Netflix doesn’t dispute that the screenshot is of a bet from 2025, but a spokesperson told The Hollywood Reporter that none of the documentary footage was fabricated.

“The footage was filmed at the Winible World Cup Watch Weekend in Las Vegas on July 17, 2026,” the spokesperson said. “The featured trader with the trade on Spain showed us a screenshot of his bet, that was made in May 2025 prior to any Nevada court order. Any specific trades or bets referenced during that weekend are between the individual and the app in which they placed the trades.”

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Anthony Ha is TechCrunch’s weekend editor. Previously, he worked as a tech reporter at Adweek, a senior editor at VentureBeat, a local government reporter at the Hollister Free Lance, and vice president of content at a VC firm. He lives in New York City.

You can contact or verify outreach from Anthony by emailing [email protected].

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Travis Hoium and Lou Whiteman, along with Motley Fool analyst Emily Flippen, discuss:

Tech crashing.What we’re watching.Netflix earnings.History of tech.Gemini delayed.Radar stocks.To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on July 17, 2026.

Travis Hoium: A new AI model is crashing the market. Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing. I'm Travis Hoium, joined today by Lou Whiteman and Emily Flippen. Guys, we got to talk about the topic of the market, at least over the past 48 hours or so. That is tech stocks dropping like a rock. This is everything that was on fire, Emily, over the past six months, over the past maybe 18 months. Now they've suddenly fallen back to Earth. We're talking about memory, we're talking about equipment makers. There's a number of different catalysts here. This could be the AI model Kimi that has come out of China. It could also be earnings season. When you're seeing these stocks fall, what is in your mind as an investor?

Emily Flippen: The first thing that comes to mind is trying to understand what is the core driving principles that's resulting in a sell-off that we're seeing across the board. Trying to reconcile Netflix and Micron, you're probably scratching your head thinking to yourself, what do these companies have in common? The short answer is, they're very popular with retail investors. In fact, if you look across the board, a lot of the stocks that are down massively are very popular with retail investors. We've seen a lot of people flood into companies, whether that be for fear of missing out, whether that be just part of the hype cycle. As we start to get earnings from these businesses, as people's fear starts to grow, then you have people who never really had a thesis in the first place for buying in start to panic.

When you buy into a company without a real thesis for why you're holding that business, hopefully for the long term, then it's really easy to panic whenever the market starts to sell off. I think the across the board selling off that we're seeing, it can be a result for Micron of memory shortages, for Netflix, as a result of earnings, for IBM. Good Lord, who knows as a result of IBM, whether it be internal struggles or a sell off in the software industry in general, but all of these things are different dynamics, all being driven by the same core principles, which is I'm an investor, and I'm afraid. I'll tell you what, the market is made up of humans. It's made of people who make emotional decision. I think I see personally a lot of emotional decision making happening this week.

Lou Whiteman: It's fine, we never notice it on the way up. Micron is down, how much percent, but they're also trading where they did in early June. IBM is at its worst day in history, and it fell back to where it was in May. We take it for granted on the way up, and then we panic about it on the way down. It's not healthy investing. It's not fun. It's why I don't have any hair. But I think it's separate to the core principles of fine good companies and stick with them. This is just the market marketing. This is day to day fluctuation. Like I say, it's a ton of fun on the way up, and it's a ton of despair on the way down. Trying to normalize and maybe not get too caught up in it on the way up, and not get too caught up in it or lay down is probably the way to go. But hey, you tell my emotions that because that's not easy.

Emily Flippen: There's actually a lot of good psychological evidence to your point, Lou, that shows investors feel losses twice as worse as they benefit from gains. If the stock goes up 20%, that's great. You feel good about that, but you actually feel twice on average, worse when a stock goes down 20%. You feel those losses a lot more. It's understandable if a lot of people are listening to us today feeling really afraid, feeling literal pain from what's happening in their portfolios.

Lou Whiteman: If you think about, by definition, like if I buy a stock, the stock goes up, I'm not really affected by that. Like, that's why I bought it. But then when it goes down, I think on a deep psychological level, we are wired to notice fear more, but also just common sense. It's like this isn't going to script. We are now having a moment where things aren't going to script.

Travis Hoium: There's a lot of threads that we can pull on here. I want to get to things like leverage in the market and some of that short-term dynamic that we've seen with options. I know there's a ton of leverage in South Korea, for example, which is impacting some of those memory stocks. But, Emily, you talked about earnings. One of the things that I have noticed with a lot of the commentary among that retail investing crowd, those are the people that we are talking to on a day-to-day basis is you see an earnings report from a Netflix or from a Micron, and you go this earnings report was really good. Why is the stock down?

I think this is a reminder of one, the market is a forward-looking mechanism. The market is thinking about what is the world going to look like 6-18 months from now? But taking an even longer-term view is where the winds come in, The Motley Fool style of investing, of long-term investing. There are lots of people who are thinking about the next month or the next quarter. The market is thinking about the next 6-18 months. Very few people have the ability to think about the next 5-10 years unless you're investing your own money. That's where there is Alpha to be had, but if you're doing then you have to read those quarterly reports in a little bit different way.

Emily Flippen: That's why some of the data I actually saw come out earlier this month was particularly heartbreaking to me, Travis. FINRA reported that there was more than $500 million in new margin, new debt, margin accounts, mostly driven by retail investors at banks across the United States. That's a massive increase. There's a lot of reasons for that. Obviously, inflation is high. The value of our market is higher. All of these things can push up the average balance of a margin account. But also, most importantly, we've expanded the amount of financial securities that retail investors have access to, options trading being a really big one. More and more people, in my personal experience, just speaking anecdotally, tend to view investing like gambling. Those two things are very different in my mind.

What you're doing as a retail investors, if you're trading on margin, if you're putting up stop-loss orders, if you're participating in the prediction market, or trying to buy individual stocks, the same way you would a betting account, then that is a concern because your No. 1 advantage as a retail investor, as an individual person is that you are beholden to nobody but yourself, which means you can have as long term a view as you want. Banks and other financial institutions systematically have shorter-term views because they’re held to shareholders or stakeholders, and that’s part of that equation.

Travis Hoium: If you're running a fund, somebody can pull their money out of your fund. You’ve got to outperform this quarter this month, or I'm going to take my money out and put it elsewhere.

Emily Flippen: Why would you, as a retail investor, as somebody just listening to this podcast, take away what is your number one biggest asset, which is your long-term view, and start to trade based off of short-term noise? It's how you set yourself up for failure. How you set yourself up for success is by taking the broader points. In fact, this short-term trading usually offers buying opportunities for investors who are prudent enough to hold through these downturns.

Lou Whiteman: Morgan Housel is, I think, saying this the best, that your advantage is playing your game, and that's what Emily is talking about. By default, I don't give analysts a hard time when they miss because their job is to look three months into the future. My job is to try to find companies that are strong enough that whatever may come in the near term, that they will survive and thrive long term. The one I love to point out is all the banks sold off when Silicon Valley Bank went down. A lot of self-recommendations or hold recommendations were issued. That made sense because the next 3-6 months were going to be really nasty for the banks, and that is what those holds or sells were reflecting. But I don't have to worry about 3-6 months. I can say this is a good institution that's going to be around, I think, for the next 50 years. It was a buying opportunity for me, even if they were correctly calling it a sell for near-term momentum. That's the mindset that I think works. But again, this sounds so good on paper. Then a stock that you just bought is down 20% the next day, and it's much harder to execute on.

Travis Hoium: Speaking of stocks that are down, when we come back, we're going to talk about Netflix and why shares were down double digits early this morning. You're listening to Motley Fool Hidden Gems investing.

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Travis Hoium: Welcome back to Motley Fool Hidden Gems Investing. One of the big earnings reports for this week, and we've got a ton that's coming over the next two weeks, but Netflix caught a lot of investors off guard. Stock was down double digits early this morning. We're recording on Friday morning, down about 8.6% as we're recording right now. Emily, as you look at the numbers, is there any major red flags here, or is this just Netflix becoming the bigger, more mature company that has to deal with regular big company stuff that they all do?

Emily Flippen: How about a third option, which is, I think the reaction. Now maybe I'm overstating it. I think the reaction has nothing to do with its maturity or the numbers it was reported. I think it has a lot to do with the commentary management provided about what investors should be looking at. We saw a very similar reaction just over two years ago when Netflix reported first quarter earnings, I believe in 2024, and despite the fact that the results were good, the stock was down because they said that they were going to stop reporting their paid subscriber numbers. Everybody panicked and was like, crap, we've been using that as a barometer for success. Now you're telling us not to look at it, presumably, to make up for what will be poor subscriber numbers. Netflix, of course, has done well over the course of the past couple of years. It didn't really make a difference. But one thing they said this quarter, I think, could be causing the same market reaction, which is that they're going to no longer be reporting at least not to the same frequency, their engagement metrics. Again, the market is presuming here, are you trying to cover up poor engagement?

Travis Hoium: Does this also coincide with the Nielsen data is the one that I always think is interesting. Nielsen has said Netflix's market share of TV time is either flat or maybe even declining, depending on the month you're looking at it, and YouTube is the one that's taking share.

Emily Flippen: Exactly. The market is extrapolating this and saying, we've been using engagement now as our barometer. It looks like engagements going down. You're giving us less information. In Netflix's defense, part of the logical reasoning, I think, they're providing for this is that competitors, to your point, like YouTube, don't actually report a lot of this stuff. Use third-party data, and you can get an idea for it, but it's not like Alphabet or Google is out here telling us all the details about the most successful YouTube shows on their platform. They don't necessarily need to. I think Netflix is looking at itself and saying, why are we jumping through all these hoops just to be judged by investors when our success, in this case, they want people to look at revenue and operating profit should speak for itself.

But I have to say, as an investor, just on a personal level, I like Netflix. I think Netflix will probably be fine. I have to roll my eyes because I went back to that 2024 letter, where they explained that they were taking away subscriber numbers, and one of the things they said investors should look at in exchange was engagement metrics. They said, "Success in streaming starts with engagement. The more they watch, the more they stick around, they recommend Netflix more often, and place a higher value on the service. This is more information than any of our competitors provide, and we expect to provide even more over time." Within the period of two years, they have once again changed the goalposts here for investors, and that irritates me.

Lou Whiteman: Emily Flippen, bringing receipts.

Travis Hoium: That was sick.

Emily Flippen: They put it out there for everyone to read. You expect us to read it. I'm reading it.

Travis Hoium: Usually, if you're going to do that, you got to take that letter down before you have the new conference call.

Lou Whiteman: You know what's great, too, is because the whole issue here is short attention span, and Emily says, I have a attention span here. But look, moving the goalposts is really annoying. I think Emily, like you said, there's probably a reason that they are, and maybe it's a lesson for all of us that CEOs say what works at the moment, which I guess we should know. But to that point, when someone tells you who they are, believe them. Netflix has been screaming from the top of the mountain for a while, things are changing.

I almost think the problem isn't them, it's us. It's investors, because we are just inevitably going to be slow to realize that things have changed and change our own expectations. Last year, they tried to buy WBD. I heard so many times, they don't need it. It's a want, not a need. Well, this is the smartest management team in streaming, I would say. They don't strike me as the type that are doing something on a whim. I think they were saying, this could really help our business. Our business is changing. They apparently kicked the tires on Roku. These are not signs that business is as normal is working the way it used to.

The latest where we had reports just this week that they're thinking about bringing back free trials. As a rule, companies that had free trials and then got rid of free trials and then bring back free trials, that's probably a sign that they have to bring back free trials. We’re moving the goalposts, yes, but the reality is the Netflix of now is a more mature company, it isn’t growing the way it used to be, and it’s on us, the investor base, to realize that. I don't want a victim-blame here because, but really, this is a great franchise. I still think the best management team, I think they'll figure it out, but just the company of before is not the company of today, and I think that is what we have to recognize.

Emily Flippen: Can I draw attention to one thing that also graded my gears? It sounds like I'm such a Netflix bear. I promise I'm not, I'm pretty neutral on the company today. But I will say they have been expanding a lot of their offerings to your point, Lou. I think they’ve been trying to acquire some opportunity here, but they’ve also been changing the platform, especially with things like gaming. They have been pushing this at users. I know because I'm on one of those active users.

Lou Whiteman: It's so annoying, isn't it?

Emily Flippen: It is annoying. But here's the thing, if that was being successful, what did you expect to get an update from management, and when I read through their letter, there's virtually no commentary around their pushing to gaming. There's a lot of commentary around live sports, live events, and how that's driving sign-ups. That's great, I really appreciated that color because that's obviously costing them a lot of money up front to get these deals. But obviously, gaming isn't working, so what's the plan there? I want an update for management, I don't have that.

Lou Whiteman: Reid and Ted, if you're watching, we actually went on the Netflix one day to watch something, got caught up in this FIFA game that we couldn't get out of with our Roku remote. We just ended up watching something on Peacock instead, so learn.

Travis Hoium: The strange thing, I appreciate the push into sports because I think that could be potentially a big thing, allows the media to a higher price point. But the fact that Netflix is I think, fumble that, they had the Christmas game last year in my local team, the Vikings was on. I don't usually watch football games live because we have YouTube TV. I have kids, we're eating dinner at the time the game was on. By the time I turned it on, I couldn't find it because it just vanished into thin air. That seems like the thing that's going on with Netflix is they would just lost sight of who they are, which is the company that was leaning into abundance. You can watch anything here at any time. Now, if you're looking for that abundance maybe YouTube is the better place to go.

The other question that I wanted just pose to you guys a little bit is, is Netflix having an identity crisis in what they're supposed to be for the consumer? When I say this, I’m taking this a little bit from my personal experience, but we have kids, and they do not have free rein of Netflix. Netflix has a lot of garbage on it. There's a lot of good content, and this is the problem with having a million shows. They also don’t have free rein of YouTube, but they do have free rein of Disney+. They can go on there and find a number of great shows to watch. Where do you fit in a world of YouTube, which is everything, and Disney Plus, which is maybe more of a spook or an HBO Max, which is going to be high-end content, or Apple TV? Emily, is this like they don't quite know where they fit in that world because they used to be everything and now everybody's specializing.

Emily Flippen: Well, the competitive landscape has certainly changed, and to your point about their own confusion about what's next for them. You can draw straight to comparison with businesses like YouTube versus Netflix, where a Netflix, they sell you an ad tier. Again, I mentioned I'm on the ad tier. I pay a monthly subscription fee to access the ad tier in a very inflationary environment where Netflix has raised prices, and everything else in my life costs a lot more, too. There's also a lot more competitive streaming services that also try to charge me to access their ad tier. I pay all this on a monthly basis without even having full rein over the content that I'm watching without seeing ads.

Now compare that to a proposition for YouTube, I pay nothing to go onto YouTube. Now, I have to watch a few ads when I get on there, but that's the same experience that I have on all of my other streaming services, and YouTube is free. I do think some of the engagement we're seeing, yes, there's a difference in quality content and directionally like the type of audience that Netflix is targeting, all of that is up for discussion, but I would say the bigger dynamic we're seeing is probably cost-cutting broadly, especially here in the United States, but even globally, in the face of higher inflation, lower wages where people cannot afford to have 500 streaming services, they instead go to what is quite literally the free option. Maybe that's the reason why Netflix is bringing back free trials is because they're recognizing that they have to be more competitive with free platforms like YouTube. I wouldn't be surprised if at some point in the future, Netflix just installs more ads and makes their ad tier free in order to attract better engagement.

Lou Whiteman: Maybe so. Travis, to me, your story is just back to this point where it isn't the Netflix of old. I think that what they have to do is have enough compelling content that I think what the ad tier here is what, 8.99 now or something, that I just have it on inertia. Again, I think they're well capable of that.

Travis Hoium: Their turn is still really low. I think it's 3%, industry is pleading.

Lou Whiteman: But again, as investors, we can have this company, and we can enjoy it, and it can be a good company, but it's not going to be the growth story it was. That just takes it full circle for me. They are what they are. They aren't just conqueror of all worlds, the way we thought a few years ago. It's still a well-run company that can make money.

Travis Hoium: It's going to be really interesting to see what they do in the future, especially as a company like NBCUniversal, which happens to have theme parks is now spun off, maybe acquired by somebody at some point in the future. That could be a really interesting asset if they were interested in Warner Brothers Discovery. When we come back, we are going to talk about how fast the world is moving these days. You're listening to Motley Fool Hidden Gems Investing.

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Travis Hoium: Welcome back to Motley Fool Hidden Gems Investing. In this section, we like to have a little bit of fun with investing. I want to bring history into this once again, give a little bit of a quiz. But the idea here is to show how fast things are moving these days, why? What seems really obvious in 2026 may seem completely antiquated by 2027 or 2028. But let's go back and look at how slow things happened years and decades ago. Let's start with the auto industry. Emily, do you know when the first Model T was produced?

Emily Flippen: I know I have to go back a long time here because I have to ask you, Travis, Model T, that was Ford, right?

Travis Hoium: Ford, yes.

Emily Flippen: First vehicle. Gosh, my dad is a U.S. history professor. This is going to be especially embarrassing, but I'm going to ask.

Travis Hoium: I'm not going to send him this episode, are you?

Emily Flippen: Certainly not. You would be ashamed. I'm going to say, I assume it's the early 1910.

Travis Hoium: Pretty close. Lou?

Lou Whiteman: One dollar. Now, I'll go 1905. I don't know.

Travis Hoium: 1908, so Emily takes this one. It's so interesting how not a lot has changed about the four wheels, the engine, obviously, the vehicles have gotten better. But that industry has not just fundamentally been disrupted. Since then, you could maybe argue something like Tesla coming in with a more vertically integrated business model. But the next major disruption, I would argue would be Uber. Lou, when was the first Uber ride? I'm going to actually demand a month here, as well.

Lou Whiteman: Gosh, da da da da, January, because they started at the beginning of the year of 2011.

Travis Hoium: Emily?

Emily Flippen: I want to say I'm at a disadvantage here because I'm pretty sure I wasn't even of legal driving age when Uber [inaudible] first.

Travis Hoium: Perfect. You can see what matters more here.

Emily Flippen: But I'm going to go maybe a bit earlier than what Lou is expecting. I remember using the app when I went to college in China in 2013. If I was catching on to it by 2013, then I'd assume it was at least around for a while. I'm going to do a one dollar on Lou. I'm going to say January of 2009.

Travis Hoium: Emily, you are very close. March of 2009 is the correct answer. One of the first apps on the App Store, I think that was when the second iPhone came out, right? That would have been 2008. I don't know the exact date of that, but that was really the thing that pushed them into developing that. It was Uber cab, originally. That brings us to autonomous vehicles because we went 100 years from the first mass market vehicle to the first ride-sharing app that caught on, and it caught on extremely fast. But the first autonomous ride with no driver, there was a safety driver at this point. Emily was in what year? If you have a month, I will give you bonus points.

Emily Flippen: I think it's probably much earlier than people expect. If we're talking about Uber and 2009-ish. I want to say it's maybe 2014, 2015, with a safety driver on existing roads. You said a month right, Travis? Let's go with May 2014.

Lou Whiteman: That's really close. I want to do just June 2014 to do that to you. I'll say May 2015. It's right around there somewhere, though.

Travis Hoium: Maybe, maybe I missed this caveat. The first commercial ride was December 2018. They were doing testing rides with safety drivers, but there was no one who could actually physically get in one unless you were working for Waymo, and that was the Waymo One. Let's go to computing. Lou has got a good memory here. When was the first Apple computer, the Apple I?

Lou Whiteman: I can go back to when I was in school for this. God [inaudible]

Travis Hoium: It looks like the Apple II.

Lou Whiteman: You're right. Apple I late ‘70s, '70, '78.

Emily Flippen: There's no way. It was that early.

Lou Whiteman: Wasn't it? It was.

Emily Flippen: My gosh. Well, I going to have to take the over on that. I think it was probably in the ‘80s. What's one day past what Lou picked? No, I'll go somewhere in 1980.

Travis Hoium: Emily takes a dollar. Lou, you are too late. It was 1976. The Apple II came out in 1977. Now, here's a question. This is really going to tell you how much you know about the history of computers. I'm going to say, when was the first Windows operating system computer? I will accept one of two answers.

Lou Whiteman: Who's this for?

Travis Hoium: Lou.

Lou Whiteman: Emily, for the record, I couldn't drive then if that makes you feel better. Windows originally came, I was in middle school. I'm going to say 1986.

Emily Flippen: Again, I'm embarrassing my family here. My husband works in cybersecurity, and he's a Linux developer. I'm trying to cross-reference what I know about what Windows took from Linux when Linux was developed. Remind me again what Lou picks some where in the 1980s.

Lou Whiteman: It's '86, I think, mid-80s.

Emily Flippen: Just to save myself embarrassment, 1989.

Travis Hoium: The first Windows-branded operating system was 1985. But the other answer I would have accepted was the original Microsoft operating system, which was Lou?

Lou Whiteman: DOS.

Travis Hoium: DOS. In 1981, the company that they acquired when Bill Gates promised IBM that they had an operating system that was in the works, and he lied through his teeth and created the company that we know today.

Emily Flippen: These questions feel a little bit like age discrimination.

Travis Hoium: But the fascinating thing here is this was between the 1970s, and I would argue even today, it's still the same companies who are dominating a lot of these spaces. Apple, Microsoft. Quickly, first iPod, Lou?

Lou Whiteman: God, this I don't know. Gosh, 1999.

Travis Hoium: 2001, Emily, you got to know this. When was the first iPhone?

Emily Flippen: You think I know that? When I was never cool enough to have an iPhone, or are you kidding me, I had a flip phone through all of high school? I'm going to say 2009.

Travis Hoium: 2007. I think it was earlier.

Lou Whiteman: It killed my Palm Pre.

Travis Hoium: Remember Uber launched in 2009. There was a bunch of different. I have friends who still love the Palm.

Lou Whiteman: I want the Palm Pre back.

Travis Hoium: The Internet is, I think, one of the most fascinating, partly because The Motley Fool grew up on the Internet. I believe it was 1994, that was started on the message boards and AOL. When did Prodigy launch its first dial-up service, Lou?

Lou Whiteman: Prodigy. We were a CompuServe family, so I don't know about that.

Emily Flippen: What is Prodigy and CompuServe?

Travis Hoium: This is before Netflix. This is before AOL launched. This was the first time I got on the Internet.

Lou Whiteman: Do you know if Prodigy was before CompuServe Vic or AOL? It was, wasn't it?

Travis Hoium: It was before AOL.

Lou Whiteman: I'm going to say 1985 again. That's just going to be my go-to answer for all these.

Emily Flippen: You're not going to let me embarrass myself any further.

Lou Whiteman: Embarrassed for Sofia.

Travis Hoium: It was 1988. I don't know exactly when we had it, but we had this for a few months. The interesting thing was, it was extremely slow. The first dial-up service, and it was extremely slow, very limited information. The interesting thing going back and looking at this was they were trying to figure out what the business model was. There was no putting credit cards on the Internet at that point. There was no, you know, SaaS business model, so you had a limit of 30 personal messages a month. I was just different.

Lou Whiteman: It was owned by AT&T? I think it was or something like that.

Travis Hoium: Maybe it was later on. Emily, when did Netscape launch?

Emily Flippen: If I'm comparing to Prodigy, I'm going to assume in mid 1990s. Let's say 1995.

Travis Hoium: 1994. Lou, this one is for you. I have a two-part question. When was AOL founded America Online founded as a company, and when was it actually named America Online?

Lou Whiteman: It was quantum computer service before that.

Travis Hoium: That's a good memory.

Lou Whiteman: I'm going to keep doing this. I'm going to say 1985.

Travis Hoium: Wait. Is that going to be for them?

Lou Whiteman: It was 1985. It was founded as Quantum Computer service, and then later renamed as America Online.

Travis Hoium: It's renamed in early ‘90s.

Lou Whiteman: 1991. It's just that one it was so interesting how influential they were, but it was one of these stories of a company that started doing something completely different from what they ended up being known for.

Travis Hoium: Nice little lesson here, Emily is? Just guess ‘85 for everything.

Emily Flippen: Got it.

Travis Hoium: A lot that happened in 1985. Let's run through these quickly payments because I think it's interesting how fast this has changed. Emily, the first check was written.

Emily Flippen: I would assume 1930s maybe.

Travis Hoium: Goes back about 2000 years.

Emily Flippen: My God.

Travis Hoium: A little bit of a trick question there. Lou, first credit card.

Lou Whiteman: It was probably a QU back then. Is that? The first credit card was the Bank of America card, which became Visa. I don't know. The ‘50s.

Travis Hoium: Your memory is really good on this. The Bank of America card was 1958, but that actually dates back to travel air travel cards. Deltas of the world, the Uniteds of the World, have been in the credit card business since 1934, goes all the way back to then, and then a few of these were consolidated into a diners club in 1950.

Lou Whiteman: That's where that came from.

Travis Hoium: But, Emily, the first digital transaction online happened in what year? If bonus points for the company, which you know that took the money. I know so many people said, Amazon would fail because people would never put their credit card attached to an online purchase. That had to be the late 1990s, I would imagine, so I'm not to go with Amazon in 1999. Lou, do you have a different guess?

Lou Whiteman: I would guess earlier that there was some weird payment 1985, I think.

Travis Hoium: I think my credit card, my underage credit card was online by 1999. 1994, and the company, I actually have a screenshot of the website that I'll share with you guys was Pizza Hut. Pizza Hut. Put your name.

Emily Flippen: What happen in Pizza Hut.

Lou Whiteman: Isn't that, too, the famous Bitcoin story where someone bought a pizza?

Travis Hoium: It was a pizza. I was going to ask you, the first blockchain transaction was 2009. That was the last one. But it's funny that pizza is the first thing that people want to buy online. When we come back, we're going to get a little bit into what's happening with Gemini and the new model from China. You’re listening to Motley Fool Hidden Gems Investing.

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Travis Hoium: As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows The Motley Fool's editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes.

Our final topic before we get to the stocks on our radar is Alphabet stock was down this week after Gemini said that they were delaying Gemini 3.5 Pro. Interesting that the stock is down. We also have this new model coming from China that's supposedly really good, Emily. Is this something or just the noise that we've been talking about in the market?

Emily Flippen: Unfortunately, I do think it's something, and I have to say it was only a couple of weeks ago that I think I'm on video, saying in reference to Alphabet losing a lot of their top AI leaders and engineers to companies like OpenAI, Anthropic. I said, I don't think this is a big deal. They don't need the most cutting-edge model. It's only a big deal, if say, I don't know, the Gemini Pro 3.5 launch is delayed, and here we are. Do think maybe there's something happening under the hood here, but I would challenge the assumption and say, CheerPoint, we see a lot of models coming online that are either open-sourced or highly competitive. Companies are spending billions of dollars trying to get the next best model. Does Google even need to be competing here? Maybe we should just call it a loss at this point.

Travis Hoium: Lou, isn't this a distribution game for them?

Lou Whiteman: So far it has been, and they've been really good at it. They have the consumer. But yet come to Emily's point, what if it doesn't matter? I asked Gemini. Gemini said, there's 2.5 million open source models right now, and hey, Gemini should know, right? Not all of them are good. Not all of them are safe. Not all of them have value. But we focus on these frontier models, and what if they're just science projects? What if they have some value, and especially with coders, and so that's why they're all the emphasis. But for most of the business and consumer enterprises, these free things are good enough. Now, that's scary, given all the spending, so I don't know if that's good news for Google, but I sort of wonder here. It's like, maybe we're focusing on the wrong thing.

Emily Flippen: I personally vows Google would let other companies spend the money to try to have the best frontier model, but I will say, so far, the data shows that actually open source models really aren't taking massive portions of enterprise spend, even versus their more expensive competitors. There's a lot of reasons for that maybe because a lot of the better open source models are coming out of China, and there could be security risks there. But companies that, add AI into their tech stack are generally sticking with these closed paid models, thinking that they're more reliable, they have better API access, operational things, including security that just make it more feasible. Now, that could change, but right now, we're not actually seeing open source AI models take away from the majority of enterprise spend, which is where the real big bucks are.

Travis Hoium: Emily, do you think that the thing to look at would be, is there pressure on these models from a cost standpoint, though? That seems like the elephant in the room is these prices are going up for a lot of these models, especially on the frontier. But if companies start cutting back and going, Hey, we got to spend less on AI, then the option is we'll do this cheaper model.

Emily Flippen: Yes. Much more on the throttling on that cost side, but I will say it's more likely that you move down to a cheaper model probably provided by a closed system moving to an entirely open source system. I'm not the chief technology officer at a company, though, so they can make the choices for themselves. But the security risks and the closed access, we have seen this play across software. There's always been open source alternatives for paid software, but enterprises still generally pay for software. I would imagine the same is true for AI models.

Travis Hoium: A lot of things I'm going to be looking for during conference calls during earning season. Like, what is that AI spend? Are you seeing ROI from it? Because that could potentially be the pressure on some of these AI companies as we go throughout the year. Let's end with stocks on our radar, and we're going to bring in Bart Shannon from behind the glass. Emily, what you got this week?

Emily Flippen: This week, I'm looking at Uber, of course, the ticker is U-B-E-R. I imagine everybody knows it, but it's on my radar this week because they're making a relatively large acquisition just under $15 billion of a Germany based-delivery company called Delivery Hero. They already had an economic interest, so it's not entirely surprising to the market, but the reason why it's on my radar is because it kind of seems like the food delivery land grab is over between the acquisitions that DoorDash has made over the course of this year, plus this acquisition from Uber, their investment into Southeast Asian grab, as well, further diversifying their exposure. It seems like a lot of these smaller players are their intention is really, to get scooped up. Their larger competitors that have built up scale. It's really hard to be profitable in the food delivery market, but DoorDash and Uber are continuing to show that they are the leaders when it comes to food delivery and profitability, I think is a smart acquisition from Uber. Bart, are you a Uber Eats user?

Bart Shannon: I am an Uber Eats user. But I'm also cheap, so I use it sparingly.

Travis Hoium: I happen to be a DoorDash user here, but I use Uber for rides. The whole Unified app thing, I almost fall on Lou's case here that unifying all these apps is not necessarily going to be the way to go. But I don't know, maybe geographically, it's going to work out for Uber. Lou, what do you got this week?

Lou Whiteman: Bart, I'm looking at TransDigm, Ticker TDG, and they're an aerospace parts supplier that for more than two decades now has somehow managed to generate software like 50% plus margins. The stock has been a huge winner over the years, up 5,000% in 15 years, largely by acquiring companies with patented parts that are hard to compete with and just charging airlines what they want for. This week, though, TransDigm called off its latest deal, a $960 million acquisition because the Department of Justice concluded it would create a monopoly on certain parts needed for the F-16. Pentagon wasn't happy about that. This is a real shift in tone from regulators, and it does make TransDigm's path forward harder. The stock traded off as a result, near 52-week low. I note that most of TransDigm's oversized profits through the years have come from commercial. Delta Airlines doesn't care if they need a part. I think the company's now sitting on about $10 billion in firepower to either find new deals or if the DOJ really does cut them off, we turn, I don't know, maybe like one seventh of their market cap to shareholders. TransDigm at a 52-week low historically has been a time to look at it, give them the track record. I'm intrigued.

Travis Hoium: Bart, what do you think about TransDigm as an option? I have thoughts on TransDigm. It's their name. It sounds like it would be the evil Mind Control corporation in the David Cronenberg movie. But then again, maybe that's a plus. It could be. You have one stock that's going on your watch list. You pick TransDigm or Uber.

Bart Shannon: I'm going Uber.

Travis Hoium: I think probably a good pick. TransDigm. Let's just change the name to something a little bit more fun. That's all the time we have for today, thanks to Lou and Emily and Bart behind the glass and Travis Hoium. We'll see you here tomorrow.

Key Takeaways Netflix beat earnings estimates but missed revenue expectations, sending shares lower after its Q2 report.NFLX saw double-digit revenue growth driven by membership, pricing, and increased ad revenues.ETFs like FNGS offer diversified exposure amid shifting streaming investment dynamics. Streaming giant Netflix (NFLX - Free Report) reported mixed second-quarter 2026 results last week. The company narrowly beat its bottom-line estimate but fell slightly short of revenue expectations.

Consequently, NFLX shares pulled back 7.3% on the trading day following the release — a level where the stock has largely hovered since its July 16 announcement — reflecting investor disappointment over the revenue miss and narrowed revenue guidance for 2026.

Meanwhile, Netflix bought back $4.7 billion of its shares in the second quarter — its largest quarterly share repurchases on record — demonstrating strong underlying financial health despite incurring higher cash tax payments tied in part to the Warner Bros. termination fee.

Amid this backdrop, the recent pullback in NFLX’s share price may offer a golden opportunity for exchange-traded fund (ETF) investors seeking diversified exposure to the world’s leading streaming powerhouse. ETFs provide a balanced route to capture Netflix’s long-term growth potential while buffering against the single-stock volatility that often follows quarterly releases.

Before diving into the specific ETFs, let us dig deeper into NFLX’s overall second-quarter performance.

A Brief Analysis of NFLX’s Q2 ResultsNetflix’s second-quarter 2026 earnings beat the Zacks Consensus Estimate by 1.3%. Its revenues missed the consensus mark by 0.1%.

On a year-over-year basis, the company delivered double-digit revenue growth, driven by membership growth, pricing and increased ad revenues. 

In terms of engagement quantity, in the first half of 2026, Netflix members watched more than 97 billion hours, reflecting 2% growth year over year. This was slightly faster than the 1.5% growth in 2025, despite the competitive impact of the Winter Olympics and the World Cup this year. 

To expand the variety of its entertainment offering, NFLX has been launching new types of content like video podcasts, creators like Danny Go! and Salish & Jordan Matter, and cloud TV games, a trend it aims to continue in the near future as well, to boost viewership. 

The company has made notable progress on its cloud-first video game strategy this year, including the addition of several new titles, where the market opportunity is nearly $150 billion in consumer spend, excluding China and Russia. 

Netflix has also been witnessing positive growth in its kids section. Netflix Playground, which is NFLX’s app for kids games, has seen 3X growth in daily players since its launch. As a result, engagement in kids' mobile games has risen 600% year over year.

Netflix remains on track to deliver approximately $3 billion in ad revenues by the end of this year.

The company’s earlier announced partnerships with leading publishers including Condé Nast, Hearst, and People are set to bring their lifestyle content to members in the United States and several other countries beginning in August.

ETFs in SpotlightMicroSectors FANG+ ETN (FNGS - Free Report)   

This fund, with a market cap worth $557.4 million, provides exposure to 10 highly-traded growth stocks of next-generation technology and tech-enabled companies. Of these, Netflix accounts for roughly 9% of the fund’s shares.

FNGS has rallied 10.7% over the past year and charges 58 basis points (bps) in fees. 

Vanguard Communication Services Index Fund ETF Shares (VOX - Free Report)

This fund, with net assets worth $5.7 billion, provides exposure to 112 companies that provide communications services primarily through fixed-line, cellular, wireless, high-bandwidth, and/or fiber-optic cable networks. Of these, Netflix accounts for 4.21% of the fund’s shares.

VOX has risen 3.4% over the past year and charges 9 bps in fees. 

FINQ FIRST U.S. Large Cap AI-Managed Equity ETF (AIUP - Free Report)

This fund, with assets under management worth $4.08 million, provides exposure to 14-20 U.S. large-cap companies included in the S&P 500 Index. Of these, Netflix accounts for 4.37% of the fund’s shares.

AIUP has rallied 7.8% over the past year and charges 70 bps in fees.

Alphabet’s (GOOG -6.89%) (GOOGL -7.12%) YouTube has long been the leading user-created video platform, but the Google parent is so big that YouTube doesn’t get the same level of attention it would if it were a standalone company.

After all, YouTube makes up less than 10% of Alphabet’s revenue, and it pales in comparison to the massive Google Search business.

However, in the video entertainment arena, YouTube is a giant in its own right, and Netflix has long considered it its chief rival. YouTube just topped $10 billion in ad revenue in the second quarter for the first time ever, bringing in $11.1 billion in ad revenue, which doesn’t include subscriptions for YouTube Premium tiers.

At that level, YouTube is not far behind Netflix, which brought in $12.6 billion in total revenue in the second quarter.

Can YouTube catch the streaming leader? Let’s take a closer look.

Image source: Getty Images.

YouTube reported 12.8% revenue growth in the second quarter, slightly slower than Netflix’s 13.4%.

Netflix’s growth has slowed in recent quarters, and the stock has stumbled as investors worry about weak engagement, maturing markets, and its eagerness to make an acquisition, which suggests it is searching for its next growth leg. The streamer sees even slower growth in the third quarter, calling for an 11.7% increase in revenue.

YouTube’s growth rate has fluctuated within a similar range, between 9% and 21%, over the last ten quarters.

Though they have different business models, with Netflix charging a monthly fee to watch traditional television and movie programming, and YouTube selling ads alongside user-generated content, both platforms are highly profitable. Netflix reported an operating margin of 33.4% in the second quarter. Alphabet does not report operating margins for YouTube, but Wall Street analysts estimate it to be somewhere in the teens. YouTube shares revenue with content creators, which decreases its margins. Alphabet’s Google Services business, which is mostly made up of advertising, reported an operating margin of more than 40% in the second quarter.

Netflix and YouTube have also borrowed from each other’s playbooks in recent years. YouTube, once an entirely free service, has begun selling premium subscriptions for everything from music to traditional pay-TV to NFL Sunday TIcket.

Netflix, on the other hand, launched its advertising tier a few years ago, and it continues to be one of its strongest sources of growth for the company, and it’s aiming to double ad revenue from $1.5 billion to $3 billion this year.

A win-winNetflix’s lead over YouTube, though narrow, looks safe for now. While the two companies are competitors, there’s room in the market for both to succeed, as they serve different niches. Though Netflix sees all viewing time as competition, it’s often serving a different use case than YouTube.

Investors can’t invest directly in YouTube, but both of these platforms look poised for continued success and are likely to continue learning from each other. Expect both to continue delivering double-digit growth in the years ahead.

Wall Street is worried about Netflix's new shows. Its old ones are its secret weapon.

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Netflix gets lots of attention for new seasons of hit series like "Bridgerton." But those shows aren't what drives most viewing on the service. Liam Daniel/Netflix Wall Street worries that Netflix has an engagement problem. Netflix says it's doing fine, actually.

Wall Street worriers base their fears, in part, on the viewership data Netflix periodically releases — data Netflix says it's going to give out less frequently now. But you can also look at that same data and find reasons to be more optimistic about Netflix's prospects.

So here's a pro-Netflix story, expressed in chart form, courtesy of MoffettNathanson analyst Robert Fishman:

Robert Fishman/MoffettNathanson It also requires some explanation. What Fishman is pointing out is a basic-but-important idea to keep in mind about Netflix-created shows and movies: They get a ton of their viewership in the first few days and weeks they're released. But then they get a ton of viewership over time, too.

So this chart is showing you that in the first half of 2026, more than half of the viewership in Netflix originals was generated by stuff released before the summer of 2025.

That is: Yes, Netflix viewers watched a ton of the new "Bridgerton" season last spring. But they also watched, for instance, lots of old seasons of "Stranger Things" — a show that debuted in 2016. And a lot of "Gabby's Dollhouse," which debuted in 2021. They also spent meaningful time with a Jeffrey Epstein documentary that originally aired in 2020.

Equally important: While there has rightfully been a lot of recent attention on the performance of Netflix's highest-profile shows, Fishman also points out that those shows only account for a slice of Netflix viewing. In the first half of 2026, the top 20 Netflix series accounted for just 14% of total engagement — a ratio that's been pretty consistent for years. Which means that most people are spending most of their Netflix time watching something other than its biggest hits.

"Net-net, while hits remain important, it is really the longer tail titles that drive the vast majority of engagement on Netflix," Fishman writes.

The "long tail" is a very old concept that has taken some beatings over the years. But in Netflix's case, it is bearing out: In an on-demand internet world, lots of people will decide to consume the same movies, shows, songs, whatever. But at the same time, lots of people will seek out niche stuff. And if you add all those niches up, they amount to a very big number.

The long tail doesn't fully answer the problem Netflix bears are highlighting: If your most popular new stuff isn't performing as well as your most popular stuff used to perform, you can't simply dismiss that by saying it doesn't really matter since your old stuff is still popular.

And arguing that not all engagement is the same, anyway — something Netflix has been saying recently — won't make the concern go away, either.

What investors would like — as would Netflix — are numbers showing that Netflix's biggest shows are getting more popular.

Perhaps Netflix won't be able to figure out how to make that happen. The law of large numbers is a real thing, and Netflix now has an astonishing 325 million subscribers. Each new one will be harder to get, which is why the company is focused on extracting more value from each subscriber it does have, via tactics like price hikes and its newish ad business.

That size helps explain why Netflix made a swing-for-the-fences bid for (much of) Warner Bros. Discovery: If you're so big that growth is harder to generate organically, maybe you buy some.

The good news for Netflix is that while they figure that out, they have a good fallback position: A service so large that lots of people will find something to watch, and which keeps them subscribing month after month.

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Peter Kafka You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.

Peter covers media and technology for Business Insider; previously he has worked at Vox, Recode, AllThingsD, and Forbes. He was also the first hire at Silicon Alley Insider, Business Insider's predecessor. 

Tech Netflix TV More Movies

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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 (NFLX +2.03%) has been evolving its business over the years by adding live sports, podcasts, and even games. Its subscriptions now offer a wider range of entertainment options, and they've proven superior to other streaming services, enabling the business to grow while also commanding strong profit margins.

But its largest rivalry may still be in its early stages, and it's one even my kids see coming. Netflix may be on a collision course with YouTube. Here's why I think it'll be far and away its biggest rival in five years.

Image source: Netflix.

Netflix has been adding content from popular creators In what appears to be a more concerted effort to attract traffic from YouTube, which is owned by Alphabet (GOOG +0.30%)(GOOGL +0.37%), Netflix has been adding content from creators such as Ms. Rachel, Mark Rober, and many others. The first season of Ms. Rachel generated 37 million views in the first six months of the year, according to Netflix's data, and ranked as the ninth-most-watched show during that period.

Not only is bringing in more content creators on Netflix's platform a more cost-effective option for the streaming company than producing its own shows, but it can also quickly add a wider range of content to its platform to drive more growth. Between bringing on more creators and adding podcasts, Netflix may already be preparing for a much bigger battle brewing ahead with YouTube.

The challenge will be that, since YouTube is accessible without a paid subscription, Netflix will need to convince viewers that comparable content is worth paying for. One option, however, could be that the streaming company drastically changes its strategy and, like YouTube, begins to offer content without a subscription, relying entirely on ads.

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This could be Netflix's biggest challenge yet YouTube has a huge advantage given the sheer breadth and depth of its offerings. Not only is there a wide range of content available on its platform, but it's also more convenient for people who don't want to watch long shows or movies but still want something longer than just a short. And with Netflix raising its prices over the years, it may not offer the same enticing value it once did.

Netflix may not be doomed, but it may be facing its most formidable rival yet in YouTube. Alphabet is a tech giant with the deep pockets and resources necessary to back YouTube's continued growth, as it has also been expanding into live sports.

This year, Netflix's stock is struggling, and although I still think it can do well in the long run, investors are right to be at least somewhat worried about its future.

HomeEarnings AnalysisCommunication Services

SummaryNetflix has transitioned from a high-growth stock to a mature value asset, with shares correcting to reflect slower growth and market saturation.At a forward P/E of 19 and TTM revenue of $48.4B, NFLX is now fairly valued for its stable, high-margin business and robust cash flow.International expansion drives subscriber growth but dilutes margins due to lower ARPU and high localization costs, limiting rapid revenue acceleration.A Hold rating is warranted; aggressive upside requires new monetization drivers, as current fundamentals and overhang from prior buyers cap near-term revaluation. Getty Images

Does the reaction of the stock market to the latest results of Netflix seem overly sharp? The quotes of the company survived a massive revaluation. Still in the spring of 2026, the shares traded in the region of $107–120, and today they dropped to the $68

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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.

Streaming giant Netflix (NFLX +2.26%) failed to meet expectations with its second-quarter results and guidance last week, but the company did mark an important first. A sequence from Argentine science fiction series and Netflix original El Eternauta used generative AI for a building collapse scene. This is the debut of final footage created with generative AI tools appearing in a Netflix original film or series.

Netflix co-CEO Ted Sarandos noted in the earnings call that it would have taken ten times as long to create the sequence using traditional tools and workflows. He framed the AI tools as a way for creators to make better content for less money.

The prospect of dramatically shorter production times and lower costs for Netflix's originals sounds great on the surface, but an old Warren Buffett quote throws some cold water on the idea that this will give Netflix a durable cost advantage.

Image source: Getty Images.

Standing on your tiptoes at a parade In his 1985 letter to shareholders, Warren Buffett laid out the trap that companies can fall into in their quest to lower costs. Buffett was talking about textile mills, a commodity business that is very different from streaming. But the lesson still applies.

Buffett's Berkshire Hathaway tried for years to make its textile business work, turning to capital expenditures that promised to lower variable costs. Buffett noted that each investment made sense in a vacuum and was backed by sound logic, but that they delivered no benefits. What was the problem? Everyone else in the textile business followed suit. "Many of our competitors, both domestic and foreign, were stepping up to the same kind of expenditures and, once enough companies did so, their reduced costs became the baseline for reduced prices industrywide," Buffett said.

Buffett likened the situation to everyone standing on their tiptoes at a parade. If everyone does it, no one sees any better, and everyone is a little more uncomfortable. Generative AI for content creation fits this mold. Netflix is seeing faster production times and lower costs, but so will all its competitors. No one will be willing to pay more for higher-quality content because the bar for quality will be raised. And, perhaps worse for Netflix, the barrier to entry into the content creation business will collapse.

Netflix has no choice but to use generative AI tools for its content. Unfortunately, there's no advantage to be had.

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AI could still strengthen Netflix While Netflix is unlikely to gain an edge in content creation, generative AI does have the potential to strengthen the advantages the streaming giant already has. Netflix's scale and its data are genuine competitive advantages, and AI can act as a multiplier. Personalization for recommending content and serving ads, fueled by a mountain of data on its subscribers, is a win that smaller competitors will have a tough time replicating.

Netflix's success in speeding up production times and lowering costs using generative AI offers a short-term cost benefit for the company, but it's unlikely to last. AI can still be a net positive, but Buffett's warning four decades ago is just as relevant today.

Netflix (NFLX +2.26%) operates the world's largest streaming service for movies and television shows. On July 16, the company reported a mixed set of operating results for the second quarter, with its earnings per share beating Wall Street's expectations, but its revenue and forward guidance falling short.

Netflix stock sank 7% after the release of its second-quarter report, adding to a 48% decline from last year's record high. An increasingly competitive landscape, combined with the recent departure of co-founder Reed Hastings (who was serving as chairman of the board) are among the other factors weighing on investor sentiment.

However, read on to find out why I think the recent pessimism has created a great long-term buying opportunity.

Image source: The Motley Fool.

Netflix continues to dominate the streaming industry Netflix has over 325 million paying subscribers, so it's towering over its nearest rivals like Amazon Prime and Warner Bros. Discovery (the owner of Discovery+ and HBO Max), which have 200 million and 140 million members, respectively. Staying ahead of the competition requires innovation, an attractive content slate, and flexible membership options.

In late 2022, Netflix introduced a new subscription tier at an affordable price point, supported by advertising. It costs just $8.99 per month, whereas the ad-free Standard and Premium plans cost $19.99 per month and $26.99 per month, respectively. However, ad-tier members have the potential to become more valuable over time, because Netflix can charge businesses more money for advertising slots as this user base grows.

Ad slots also command a premium during live programming, so Netflix is investing heavily in sports content from across the National Football League (NFL) and Major League Baseball (MLB), boxing, and even World Wrestling Entertainment (WWE). Plus, the company says 6 of the 10 biggest new-member sign-up days over the last five years have come from live events, which also give the subscriber base a huge boost.

But despite all of its efforts, Netflix's second-quarter operating results mostly missed Wall Street's expectations. The company generated $12.56 billion in revenue, slightly below analysts' $12.59 billion estimate. Management also narrowed its revenue guidance range for 2026; it was previously $50.7 billion to $51.7 billion, and now it's $51 billion to $51.4 billion. The midpoint of both ranges is $51.2 billion, so, despite disappointing some analysts, I think it simply means management now has more clarity about where revenue might land.

Advertising revenue remains on track to be a real bright spot in 2026. Netflix expects it to come in at $3 billion, which would be double last year's result.

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Netflix stock is cheap right now One area in which Netflix topped Wall Street's expectations during the second quarter was at the bottom line. The company reported earnings of $0.80 per share, beating the analysts' average estimate of $0.79 per share. Earnings typically drive stock prices over the long term, so this is positive.

Based on Netflix's trailing-12-month earnings of $3.18 per share, its stock is trading at a price-to-earnings (P/E) ratio of just 21.7, a steep discount to its five-year average of 40.6. It also makes Netflix considerably cheaper than the Nasdaq-100, which has a P/E ratio of 33.4, so you could say the streaming giant is undervalued compared to a basket of its big-tech peers.

Netflix stock would have to soar by 54% in the near term just to match the P/E ratio of the Nasdaq-100, which isn't necessarily unrealistic, given that it spent most of the last five years with a P/E above 30.

NFLX PE Ratio data by YCharts

While it's true that Netflix's revenue and earnings growth are slowing, that is a typical trait of practically every company approaching maturity. Nevertheless, Chief Financial Officer Spencer Neumann believes Netflix has captured only around 7% of its estimated $670 billion global revenue market, so there could be plenty of long-term growth ahead.

Given Netflix's solid execution and the sheer size of its global opportunity, I don't think its stock should be trading at a discount to the broader market. As a result, the recent dip presents investors with an intriguing opportunity.

Posted by Defense World Staff on Jul 22nd, 2026

Acumen Wealth Advisors LLC lifted its position in Netflix, Inc. (NASDAQ:NFLX – Free Report) by 3,252.2% during the first quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm owned 25,242 shares of the Internet television network’s stock after acquiring an additional 24,489 shares during the period. Acumen Wealth Advisors LLC’s holdings in Netflix were worth $2,427,000 at the end of the most recent quarter.

Several other hedge funds and other institutional investors have also bought and sold shares of the company. Brighton Jones LLC grew its position in shares of Netflix by 5.0% in the 4th quarter. Brighton Jones LLC now owns 5,390 shares of the Internet television network’s stock valued at $4,804,000 after purchasing an additional 257 shares during the period. Revolve Wealth Partners LLC raised its holdings in Netflix by 16.4% during the 4th quarter. Revolve Wealth Partners LLC now owns 1,023 shares of the Internet television network’s stock worth $912,000 after buying an additional 144 shares during the period. Sivia Capital Partners LLC lifted its stake in Netflix by 21.2% in the second quarter. Sivia Capital Partners LLC now owns 1,406 shares of the Internet television network’s stock valued at $1,883,000 after buying an additional 246 shares in the last quarter. Strategic Investment Advisors MI lifted its stake in Netflix by 18.9% in the second quarter. Strategic Investment Advisors MI now owns 774 shares of the Internet television network’s stock valued at $1,036,000 after buying an additional 123 shares in the last quarter. Finally, Schnieders Capital Management LLC. boosted its holdings in shares of Netflix by 12.1% in the second quarter. Schnieders Capital Management LLC. now owns 2,115 shares of the Internet television network’s stock valued at $2,832,000 after buying an additional 228 shares during the period. Institutional investors own 80.93% of the company’s stock.

Wall Street Analyst Weigh In A number of brokerages recently commented on NFLX. Stephens started coverage on shares of Netflix in a report on Friday. They set an “overweight” rating on the stock. Pivotal Research lowered their target price on Netflix from $96.00 to $70.00 and set a “hold” rating for the company in a report on Friday, July 17th. BMO Capital Markets downgraded Netflix from an “outperform” rating to a “market perform” rating in a research note on Monday. Barclays dropped their price target on Netflix from $85.00 to $80.00 and set an “equal weight” rating on the stock in a research note on Friday, July 17th. Finally, Moffett Nathanson reduced their price objective on Netflix from $120.00 to $115.00 and set a “buy” rating for the company in a research report on Wednesday, June 17th. Three investment analysts have rated the stock with a Strong Buy rating, thirty-three have assigned a Buy rating, seventeen have issued a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average target price of $104.21.

View Our Latest Research Report on Netflix

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

Positive Sentiment: Netflix delivered an earnings beat and continues to post double-digit revenue growth, while bulls argue the selloff has made the stock look inexpensive on earnings and cash flow. Netflix “Is Not a Broken Company” and Trades At Just 19x Earnings. Jim Cramer Says Start Buying Positive Sentiment: Several analysts and commentators say the post-earnings drop may have created a buying opportunity, citing Netflix’s ad business, live content ambitions, international growth, and strong free-cash-flow potential. Netflix (NFLX) Stock Still Looks Cheap On Cash Flow And Earnings Positive Sentiment: Phillip Securities upgraded Netflix from “moderate buy” to “strong-buy,” with one analyst saying engagement shows no signs of slowing and setting a higher price target than the current trading level. Netflix, Inc. (NFLX) is Attracting Investor Attention: Here is What You Should Know Neutral Sentiment: Wall Street coverage remains active and largely mixed-to-bullish, with some reports pointing to meaningful upside in consensus price targets even after the recent slide. Netflix Fell 45% Over 12 Months But This Ratings House Sees A Doubling Share Price Negative Sentiment: Investors are worried about softer revenue guidance, slowing growth momentum, and Netflix making viewership metrics harder to track, which raises questions about transparency and future monetization. Netflix (NFLX) Could Be 18% Undervalued After Soft Guidance Raised Fresh Growth Questions Negative Sentiment: Multiple articles described the stock’s recent action as a sharp post-earnings crash or “miserable stretch,” reflecting concern that the latest quarter did not convince investors that growth will reaccelerate soon. Netflix just made its slowdown harder to measure Insider Transactions at Netflix In other Netflix news, Director Bradford L. Smith sold 35,990 shares of the business’s stock in a transaction that occurred on Wednesday, June 17th. The stock was sold at an average price of $77.52, for a total transaction of $2,789,944.80. Following the transaction, the director owned 79,690 shares of the company’s stock, valued at $6,177,568.80. The trade was a 31.11% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Theodore A. Sarandos sold 27,312 shares of the company’s stock in a transaction that occurred on Tuesday, May 5th. The stock was sold at an average price of $87.97, for a total value of $2,402,636.64. Following the sale, the chief executive officer owned 284,804 shares in the company, valued at approximately $25,054,207.88. This represents a 8.75% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last 90 days, insiders sold 899,839 shares of company stock valued at $80,141,661. 1.24% of the stock is owned by insiders.

Netflix Stock Up 1.6% Shares of NFLX stock opened at $68.67 on Wednesday. The firm’s fifty day moving average price is $79.42 and its two-hundred day moving average price is $86.49. The company has a current ratio of 1.14, a quick ratio of 1.41 and a debt-to-equity ratio of 0.39. Netflix, Inc. has a 1 year low of $65.08 and a 1 year high of $126.71. The firm has a market capitalization of $285.94 billion, a P/E ratio of 21.61, a PEG ratio of 0.85 and a beta of 1.52.

Netflix (NASDAQ:NFLX – Get Free Report) last announced its quarterly earnings data on Thursday, July 16th. The Internet television network reported $0.80 earnings per share for the quarter, beating the consensus estimate of $0.79 by $0.01. The company had revenue of $12.56 billion during the quarter, compared to analysts’ expectations of $12.58 billion. Netflix had a return on equity of 40.02% and a net margin of 28.22%.Netflix’s revenue for the quarter was up 13.4% compared to the same quarter last year. During the same quarter last year, the company earned $0.72 EPS. On average, equities analysts predict that Netflix, Inc. will post 3.6 EPS for the current fiscal year.

Netflix Profile (Free Report)

Netflix, Inc (NASDAQ: NFLX) is a global entertainment company that provides subscription-based streaming of films, television series, documentaries and other video content. Founded in 1997 by Reed Hastings and Marc Randolph and headquartered in Los Gatos, California, the company began as a DVD-by-mail rental service and introduced streaming video in 2007. Netflix later expanded into producing and distributing original programming, beginning notable original hits in the 2010s, and now operates a content production and distribution ecosystem alongside its licensing activity.

The company’s primary product is its on-demand streaming service, which can be accessed on a wide range of internet-connected devices and delivered through a suite of apps and web platforms.

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Jim Cramer used his Tuesday, July 20, CNBC Mad Money segment to defend Netflix (NASDAQ:NFLX | NFLX Price Prediction) after a punishing post-earnings sell-off, telling viewers the streamer’s slide into the high-$60s makes the stock worthy of a closer look.

“This is not a broken company. It’s one of the best companies around with one of the best products, and the numbers are still better than most,” Cramer said, framing the stock’s 19x forward earnings multiple as an entry point patient investors have been waiting for.

Netflix shares are down 8.44% over the past week, 12.64% over the past month, and 44.1% over the past year, closing Tuesday at $68.67. That’s a sharp reset from levels near $95.55 at the start of April.

Netflix Beat Estimates, but Investors Still Sold the Stock Netflix’s Q2 2026 report on July 16 delivered EPS of $0.80 versus the $0.7883 estimate on revenue of $12.56 billion, up 13.37% year over year, with an operating margin of 33.4%. Growth was broad-based, with Latin America up 21%, Asia Pacific up 16%, EMEA up 14%, and North America up 10%. Netflix narrowly missed on Wall Street’s revenue expectations.

However, Netflix fell from $73.985 at the filing to $68.20 within an hour. Cramer conceded the quarter was a disappointment with a weakening content slate, but pushed back on the idea that the company is now fundamentally broken.

Netflix’s Advertising Revenue Could Double to $3 Billion Cramer shared Netflix’s bull case based on an uptick in advertising revenue. “Advertising revenues should roughly double to $3 billion this year, and management believes the gap between the economics of the ad-supported and the ad-free plans is narrowing,” he said, pointing to a gap now under 45%. On the earnings call, co-CEO Gregory Peters described that closing gap as “near-term, unrealized revenue growth” the company can harvest.

The Company Captures Only 5% of Global Television Viewing Then came the runway argument. “Penetration of its addressable broadband households captures only about 7% of the entertainment revenue available in those markets, and accounts for just about 5% of global television viewing, so there’s still plenty of room for growth,“ Cramer said. CFO Spencer Neumann noted Netflix is approaching 1 billion people in audience with household penetration under 45% of ~800 million addressable households.

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Netflix Repurchased a Record $4.7 Billion of Stock Additionally, Netflix repurchased $4.7 billion of stock in Q2, its largest buyback quarter ever, with roughly $27 billion in remaining authorization after April’s $25 billion refresh. Cramer characterized it as one of the largest corporate buyback programs in America, alongside investments across ads, games, live programming, podcasts, sports, and AI.

Cramer Says Buy a Small Position and Add “Pyramid Style” Cramer advocated for interested investors to start a small position and scale up over time. “I’d put a small position here and then gradually add on to weakness in pyramid style, because I wouldn’t be surprised if the weakness sticks,” he said.

Polymarket’s active weekly market assigns roughly 81% probability that NFLX closes the week of July 20-24 in the $60-$70 range, and the July monthly market puts the highest conviction at $65 with 0.405 probability.

Reddit sentiment mirrors the split Cramer is trying to bridge. Aggregate sentiment scores dropped to 24 on Monday afternoon, while a widely upvoted r/stocks thread titled “Netflix beat earnings, did its biggest buyback and then restricted access to its engagement data and fell 12% through two days” captured the frustration. Wall Street’s average analyst price target sits at $97.91 with 37 Buy and 13 Hold ratings, which represents significant upside from the stock’s current price of $68.67.

What To Watch Cramer believes Netflix’s sell-off has created an attractive entry point, but he cautioned that the stock could remain weak in the near term. His strategy is to start with a small position and gradually buy more if shares continue to fall.

The bull case now depends on Netflix doubling advertising revenue to $3 billion, restoring engagement growth, and meeting its Q3 guidance. If the company delivers, its global growth runway, record share repurchases, and 19x forward earnings multiple could make the current decline a long-term buying opportunity.

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Netflix (NASDAQ:NFLX | NFLX Price Prediction) currently trades at $67.60, while Wall Street’s consensus price target sits at $97.91, implying roughly 44.8% upside.

The streaming giant runs the world’s dominant subscription video service with an audience approaching a billion people across 190+ countries and a rapidly scaling ad business guided to roughly double to approximately $3.0 billion in 2026. Core financials remain elite: a 33.4% operating margin and a 49.5% return on equity.

Yet the stock has cratered. At least one ratings house argues shares could nearly double from here.

How Netflix Fell 45% in 12 Months Netflix has fallen 44.1% over 12 months. The most violent leg came after Q2 2026 earnings, when shares dropped 7.8% within an hour despite an EPS beat.

Revenue of $12.56 billion narrowly missed the $12.58 billion estimate while EPS of $0.80 beat the $0.7883 consensus. Q3 revenue guidance of $12.86 billion landed softer than expected, and free cash flow fell 32.73% year-over-year due to higher cash tax payments and the Warner Bros. termination fee.

This is a company-specific reset. Broader indexes have gained ground while Netflix has bled, trading near its 52-week low of $65.08 and well below the 200-day moving average of $93.74.

BMO’s Bull Case for a Double Analysts treat the drop as an overreaction. Bank of America’s Jessica Reif Ehrlich kept a Buy rating while trimming her target to $105, calling the pullback “an overreaction” and citing Netflix’s record share buyback as management’s valuation signal. Phillip Securities upgraded the stock outright.

BMO Capital Markets sits at the top of the range with BMO with a $135 price target, a figure that would essentially double the share price. Implied upside on that call runs near 100%.

The bull thesis centers on advertising. Co-CEO Greg Peters characterized the gap between ad-tier and standard ARM as “essentially near-term, unrealized revenue growth”, and management expects ad revenue to roughly double to approximately $3 billion in 2026. Cloud games (monthly players up 11x since October 2025), live events that have driven 6 of the top 10 new member sign-up days over the past 5 years, and a $27.1 billion remaining buyback authorization support the operating flywheel.

Of the 50 analysts covering Netflix, 8 rate it Strong Buy, 29 Buy, 13 Hold, and none Sell or Strong Sell. The sell side’s refusal to capitulate at $67 is striking.

Streaming Peers Diverge From Netflix Netflix is falling alone. Disney is down modestly. Warner Bros. Discovery is up sharply. This is a Netflix-specific reset.

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Walt Disney (NYSE:DIS) trades at $96.41, down 19.44% over the past year. The consensus target of $127.64 implies roughly 32% upside, with 6 Strong Buy, 21 Buy, 2 Hold, and 1 Sell ratings leaning positive after streaming profitability inflected.

Warner Bros. Discovery (NASDAQ:WBD) trades at $25.98, up 102.82% over the past year on a definitive merger with Paramount Skydance. The average target of $29.92 implies about 15% upside, with ratings skewing Hold and 15 Holds against 3 Buys and 1 Strong Sell.

Netflix’s 44.8% consensus gap dwarfs Disney’s 32% and Warner’s 15%. BMO’s $135 view puts Netflix in a league of its own.

The Valuation Reset Netflix is off 27.9% year to date and 44.1% over 12 months, while the S&P 500 via SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 8.82% YTD and 18.25% over a year. That is roughly 60 points of relative underperformance for a mega-cap generating positive earnings.

Netflix now trades at roughly 22x trailing earnings, in line with the S&P 500 and far below its historical growth premium. The current price of $67.60 versus the $97.91 consensus target implies 44.8% upside, with 50 analysts covering the name.

Prediction markets are more cautious. Polymarket’s active weekly bracket assigns only 44.0% probability to a $60 to $70 close, showing traders pricing in near-term chop even if the analyst view eventually plays out.

The Path Forward The bull case strengthens if ads scale to ~$3 billion, engagement holds through price hikes, and management buys back stock aggressively into a rebuilding free cash flow base in 2027. That path runs from $67 toward $97 and, in the BMO scenario, toward $135. Operating margin already runs above 33%.

The bear case gains traction if Q3 revenue growth slips below the guided 12%, ad monetization ramps slower than promised, or content amortization keeps eroding free cash flow. Insider selling and neutral prediction-market sentiment are legitimate flags.

On balance, a stock at 22x earnings with a doubling ad business, 74% Buy ratings and zero Sells, carries meaningful analyst-implied upside after a 44% drawdown. But sizing matters, and the chart shows no rush.

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Netflix (NFLX +0.53%) investors were disappointed with the company's most recent earnings results. Although the streaming giant continues to grow at a decent pace, it clearly isn't enough to win over growth investors, especially with it projecting its growth rate to decline to 12% for the current quarter (down from 13%).

One opportunity for Netflix to reignite its growth could be via an acquisition. The streaming company failed to acquire assets from Warner Bros. Discovery earlier this year, but Netflix's name continues to pop up in rumors. Investors may be eagerly anticipating news of a deal, in the hopes that it can pave the next wave of growth for the business. But co-CEO Ted Sarandos appeared to have poured cold water on that, stating on the company's earnings call that "we're primarily builders, not buyers."

Image source: Getty Images.

Why Netflix might not go the M&A route Sarandos made it clear on the company's recent conference call that while Netflix may not necessarily be averse to pursuing mergers & acquisitions (M&A), it would have to make a lot of sense for the business to consider one: "Our track record is clear that we have a very high bar to do any big M&A." CFO Spence Neumann also said, "we invest in the business both organically and opportunistically through M&A."

The key word there is opportunistically. When it pursued Warner Bros., Netflix had a great opportunity to acquire top assets and content, including HBO. And it pursued the deal aggressively until it no longer made sense to do so, as the valuation climbed amid a bidding war with Paramount Skydance.

While an acquisition could certainly help Netflix's business grow, management's focus on building rather than simply buying reflects what the company has done over the years. It has reinvested in its own growth, building its content and varied offerings rather than relying on acquisitions. It has yielded strong results as the business has grown tremendously over the years, and may continue to do so for the foreseeable future.

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Is Netflix stock a buy? This year, Netflix's stock has declined by around 30%, as investors have appeared to have lost confidence in the company's path forward. While the market initially breathed a sigh of relief when Netflix walked away from the Warner Bros. deal earlier this year, the rally was short-lived, as concerns about what the company would do with co-founder Reed Hastings leaving the company began to weigh on the stock.

Uncertainty can significantly reduce a stock's value and also create attractive buying opportunities along the way. With Netflix trading near its 52-week low, it may be one of the best growth stocks for long-term investors to buy right now.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.

Posted by Defense World Staff on Jul 21st, 2026

Amova Asset Management Americas Inc. grew its stake in shares of Netflix, Inc. (NASDAQ:NFLX – Free Report) by 39.9% in the first quarter, according to its most recent disclosure with the SEC. The fund owned 186,356 shares of the Internet television network’s stock after buying an additional 53,176 shares during the period. Amova Asset Management Americas Inc.’s holdings in Netflix were worth $17,918,000 as of its most recent filing with the SEC.

Several other hedge funds have also made changes to their positions in NFLX. Brighton Jones LLC increased its position in Netflix by 5.0% in the fourth quarter. Brighton Jones LLC now owns 5,390 shares of the Internet television network’s stock worth $4,804,000 after purchasing an additional 257 shares during the period. Revolve Wealth Partners LLC grew its holdings in Netflix by 16.4% during the 4th quarter. Revolve Wealth Partners LLC now owns 1,023 shares of the Internet television network’s stock worth $912,000 after acquiring an additional 144 shares during the period. Sivia Capital Partners LLC raised its position in shares of Netflix by 21.2% during the 2nd quarter. Sivia Capital Partners LLC now owns 1,406 shares of the Internet television network’s stock valued at $1,883,000 after acquiring an additional 246 shares during the last quarter. Strategic Investment Advisors MI boosted its holdings in Netflix by 18.9% during the second quarter. Strategic Investment Advisors MI now owns 774 shares of the Internet television network’s stock worth $1,036,000 after buying an additional 123 shares during the last quarter. Finally, Schnieders Capital Management LLC. boosted its stake in Netflix by 12.1% during the 2nd quarter. Schnieders Capital Management LLC. now owns 2,115 shares of the Internet television network’s stock worth $2,832,000 after acquiring an additional 228 shares during the last quarter. Institutional investors own 80.93% of the company’s stock.

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

Positive Sentiment: Phillip Securities upgraded Netflix to Buy and set a $110 target, arguing that engagement shows “no signs of slowing” despite the selloff. Netflix Stock Forecast Gets Hiked from Hold to Buy as Analyst Sees ‘No Signs of Slowing Engagement’ Positive Sentiment: Several bullish commentaries say the post-earnings drop may have created a buy-the-dip opportunity, pointing to Netflix’s scale, ad growth, and possible upside if management executes. Netflix Crashes to a 52-Week Low After Earnings. Why This Is the Best Time to Buy NFLX Stock. Neutral Sentiment: Netflix is pushing employees toward “AI fluency,” which signals a broader effort to use artificial intelligence internally, but the near-term stock impact is unclear. Netflix’s top product exec says all employees should have an ‘aspiration for AI fluency’ Negative Sentiment: Recent earnings coverage highlights a revenue miss, weaker Q3 outlook, and concerns that growth is slowing, which helped drive the stock to fresh lows. Netflix’s Post-Earnings Crash: Should You Buy the Stock While It’s Below $70? Negative Sentiment: Multiple analysts have cut price targets or turned cautious, reinforcing the market’s concern that Netflix’s growth narrative is weakening. Why Is Netflix Stock Falling Monday? Insider Buying and Selling In related news, CEO Theodore A. Sarandos sold 27,312 shares of Netflix stock in a transaction that occurred on Tuesday, May 5th. The stock was sold at an average price of $87.97, for a total value of $2,402,636.64. Following the transaction, the chief executive officer directly owned 284,804 shares of the company’s stock, valued at $25,054,207.88. The trade was a 8.75% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Bradford L. Smith sold 35,990 shares of the business’s stock in a transaction that occurred on Wednesday, June 17th. The stock was sold at an average price of $77.52, for a total transaction of $2,789,944.80. Following the completion of the transaction, the director owned 79,690 shares in the company, valued at $6,177,568.80. This trade represents a 31.11% 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. Insiders sold 899,839 shares of company stock valued at $80,141,661 over the last 90 days. 1.24% of the stock is currently owned by corporate insiders.

Analyst Upgrades and Downgrades NFLX has been the subject of several recent analyst reports. Weiss Ratings downgraded Netflix from a “hold (c+)” rating to a “hold (c)” rating in a report on Friday, June 26th. Wolfe Research reissued an “outperform” rating and issued a $107.00 target price on shares of Netflix in a research report on Friday, April 17th. Wedbush lowered their target price on Netflix from $118.00 to $105.00 and set an “outperform” rating on the stock in a research report on Friday. New Street Research lifted their price objective on shares of Netflix from $96.00 to $102.00 in a research report on Friday, April 17th. Finally, Stephens initiated coverage on Netflix in a research note on Friday. They issued an “overweight” rating on the stock. Two investment analysts have rated the stock with a Strong Buy rating, thirty-four have issued a Buy rating, seventeen have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $104.21.

Get Our Latest Report on NFLX

Netflix Stock Performance Netflix stock opened at $67.60 on Tuesday. The business has a 50 day moving average of $79.80 and a 200-day moving average of $86.67. Netflix, Inc. has a 1 year low of $65.08 and a 1 year high of $126.71. The company has a debt-to-equity ratio of 0.39, a current ratio of 1.14 and a quick ratio of 1.41. The company has a market capitalization of $284.65 billion, a P/E ratio of 21.28, a P/E/G ratio of 0.88 and a beta of 1.52.

Netflix (NASDAQ:NFLX – Get Free Report) last posted its earnings results on Thursday, July 16th. The Internet television network reported $0.80 EPS for the quarter, topping the consensus estimate of $0.79 by $0.01. Netflix had a net margin of 28.22% and a return on equity of 40.02%. The business had revenue of $12.56 billion for the quarter, compared to the consensus estimate of $12.58 billion. During the same period last year, the company earned $0.72 EPS. The firm’s revenue was up 13.4% compared to the same quarter last year. On average, equities research analysts predict that Netflix, Inc. will post 3.6 earnings per share for the current year.

Netflix Company Profile (Free Report)

Netflix, Inc (NASDAQ: NFLX) is a global entertainment company that provides subscription-based streaming of films, television series, documentaries and other video content. Founded in 1997 by Reed Hastings and Marc Randolph and headquartered in Los Gatos, California, the company began as a DVD-by-mail rental service and introduced streaming video in 2007. Netflix later expanded into producing and distributing original programming, beginning notable original hits in the 2010s, and now operates a content production and distribution ecosystem alongside its licensing activity.

The company’s primary product is its on-demand streaming service, which can be accessed on a wide range of internet-connected devices and delivered through a suite of apps and web platforms.

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TV specialist Netflix (NFLX 1.99%) reported its second-quarter results on Thursday, and the report itself was uneventful. Revenue rose 13% year over year to $12.6 billion, matching management's forecast, and operating margin came in slightly ahead of plan.

Shares still fell about 7% on Friday, to $68.95 -- within a few dollars of their 52-week low.

The drop extends a miserable stretch. Netflix stock has lost more than 40% of its value over the past year, and it's down about 46% from its 52-week high of $126.71.

The sell-off has also produced a valuation that would have seemed unthinkable a year ago. The streaming giant trades at about 22 times earnings.

So, is the beaten-down growth stock finally a bargain?

Image source: Netflix.

A solid quarter by almost every measure There wasn't much to criticize in the report. Second-quarter revenue growth was driven primarily by membership growth, pricing, and increased ad revenue, and the company delivered double-digit gains in every region. Operating income rose 11% year over year to $4.2 billion, though the company's operating margin of 33.4% narrowed slightly from 34.1% in the second quarter of 2025. And earnings per share climbed 11% year over year to $0.80.

The full-year outlook is intact, too. Management narrowed its 2026 revenue forecast to a range of $51.0 billion to $51.4 billion, representing 13% to 14% growth, and it kept its operating margin target of 31.5%, up from 29.5% in 2025.

That forecast implies operating income growth of more than 20% this year. Netflix also still expects a rough doubling of its advertising revenue in 2026, to about $3 billion.

And the company is notably returning cash to shareholders at a record pace. Netflix repurchased $4.7 billion of its stock in the second quarter (its largest quarter of buybacks ever), and it still has $27.1 billion of repurchase capacity after its board added $25 billion to the program in April.

Clearly, the business itself is doing fine.

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The problem is the trend The problem is Netflix's growth trajectory. In the fourth quarter of 2025, revenue grew 17.6% year over year. Growth slowed to 16.2% in the first quarter of this year, then to 13.4% in the second. And management's third-quarter forecast calls for growth of about 12%.

Each step down is small. But that's three straight quarters of deceleration, with no floor yet in sight -- and some of it, I suspect, is simply the arithmetic of size catching up with the company.

Investors paid a premium for Netflix stock for years because its growth rate kept defying its size. As the growth rate has come down, the market has been repricing the stock from a premium growth story to something closer to a maturing one.

There is a caveat to the 22-times-earnings figure, however. Netflix's trailing profits include a one-time $2.8 billion termination fee the company collected in the first quarter after its deal for Warner Bros. Discovery's studio assets fell apart, and that windfall flatters the multiple.

Shares trade at about 20 times forward earnings. For a company forecasting operating income growth of more than 20% this year, that's arguably a fair price -- maybe even a modest one. But a multiple like this only stays fair if growth stabilizes somewhere near management's forecast. Valuations built on decelerating growth can keep compressing.

Of course, there are also reasons to wonder whether it stabilizes. Members watched more than 97 billion hours on the service in the first half of 2026, up 2% year over year. That's healthy engagement, but pricing is still one of the main drivers of revenue growth these days. The company also describes the entertainment industry as "dynamic and competitive," and it's fighting for viewing time against deep-pocketed rivals.

So, with shares a few dollars off their low and the froth mostly gone, is it finally time to buy? Not for me. The valuation is the most reasonable it has been in years, but the one thing that would make me comfortable paying even 20 times forward earnings (evidence that the growth step-down is leveling off) isn't in the numbers yet. After all, management's own forecast says the slowdown continues at least through the third quarter.

I'll keep watching for that floor. If revenue growth stabilizes in the low double digits while the operating margin keeps expanding, today's price could look cheap in hindsight. But until the trend turns, I'm staying on the sidelines.

Key Takeaways Netflix beat Q2 earnings estimates, but weaker revenues and lower 2026 guidance weighed on sentiment.NFLX maintained its operating margin target as costs are expected to ease in the second half of 2026.Netflix cites buybacks, cash, content and ads as strengths, but valuation and competition remain concerns. Netflix (NFLX - Free Report) delivered second-quarter 2026 results that beat the Zacks Consensus Estimate for earnings, yet the streaming giant's cautious commentary on engagement and margin pressure has left investors questioning whether the stock deserves fresh capital right now or a longer wait on the sidelines.

The stock fell more than 8% in after-hours trading on July 16 as the company missed second-quarter 2026 revenue expectations and issued lower guidance for 2026.

Shares of Netflix have plunged 28.1% in the year-to-date period compared with the broader Zacks Consumer Discretionary sector's decline of 10.2%, underscoring how sentiment has soured even as the underlying business keeps growing steadily and delivering healthy cash generation quarter over quarter, leaving the market clearly split between near-term skeptics and patient long-term believers watching closely.

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

Beat Overshadowed by Cautious ToneSecond-quarter revenues rose roughly 15.6% year over year, with operating margin landing at 33.4%, down from 34.1% a year earlier as technology, development and marketing costs climbed. Six-month revenues reached $24.81 billion, aided by a termination fee tied to the abandoned Warner Bros. Discovery pursuit, which lifted other income and boosted first-half net income to $8.68 billion.

Third-quarter revenue guidance of 12% reported growth trailed the pace investors had grown accustomed to, and view hours grew just 2% in the first half, a modest acceleration that still points to lingering engagement challenges amid intensifying competition for viewer attention across platforms.

Netflix narrowed its full-year 2026 revenue outlook to $51.0-$51.4 billion (from $50.7-$51.7 billion previously), suggesting 13-14% growth, while maintaining its operating margin target of 31.5% and held its content amortization outlook, noting costs are expected to decelerate into the back half of the year after peaking during the second quarter, a sequencing detail that investors will be watching closely for confirmation.

The Zacks Consensus Estimate for 2026 earnings is pegged at $3.60 per share. This indicates a 42.29% increase from the previous year.

Content Slate Remains a Bright SpotNetflix's programming pipeline offers a partial offset to the softer outlook. The back half of 2026 brings new Stranger Things spinoff episodes, the fourth season of Lupin, the final season of The Witcher and an expanded live-event calendar spanning NFL games, WWE and MLB programming. Looking to 2027, Netflix plans to stream the FIFA Women's World Cup and extend its advertising tier into 15 additional international markets, broadening its long-term advertiser base even as near-term contribution stays limited for now. The advertising business itself remains on track to roughly double 2026 revenues to about $3 billion, with U.S. upfront negotiations described as progressing toward completion in the coming weeks.

Continued price realization from the March subscription increases, still rolling through existing members' billing cycles, should support revenue durability into the second half of the year and cushion against any further softening in engagement trends.

Valuation and Competitive LandscapeFrom a valuation standpoint, Netflix appears overvalued, trading at a forward 12-month price-to-sales ratio of 5.31X, notably higher than the Zacks Broadcast Radio and Television industry's 3.74X, and it carries a Value Score of D, signaling shares are pricier than industry peers relative to underlying sales growth trends.

NFLX’s Valuation
Image Source: Zacks Investment Research

Disney (DIS - Free Report) continues investing roughly $24 billion in fiscal 2026 content while folding Hulu into Disney+, with a 2027 theatrical and streaming slate leaning on established franchises to defend engagement and pricing power across its broader entertainment portfolio. Amazon (AMZN - Free Report) is expanding Prime Video through live sports, a deepening originals library, and a planned unified cross-platform search feature heading into 2027, positioning Amazon as a growing distribution hub for advertisers and viewers alike. Apple (AAPL - Free Report) keeps building Apple TV+ around prestige originals and sports rights, with a second-half 2026 and 2027 slate of scripted dramas showing how Disney, Amazon and Apple are jointly raising the competitive bar Netflix must now clear.

Hold Steady Amid Mixed SignalsNetflix's raised free cash flow guidance, record quarterly buyback of $4.7 billion, and $9.13 billion cash position all suggest financial flexibility that few streaming peers can easily match today. Yet the combination of decelerating revenue growth guidance, margin pressure from elevated content spending, and a stretched valuation relative to the broader industry argues against chasing shares aggressively at current levels. Existing shareholders have reasonable grounds to hold given Netflix's durable content pipeline and advertising runway, while prospective buyers may be better served waiting patiently for a more attractive entry point as near-term growth and engagement trends play out more clearly over the next couple of reporting quarters ahead. NFLX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of NFLX either through stock ownership, options, or other derivatives. 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.

Have you evaluated the performance of Netflix's (NFLX - Free Report) international operations during the quarter that concluded in June 2026? Considering the extensive worldwide presence of this internet video service, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.

In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must understand a company's dependence on overseas markets, as this offers a window into the company's earnings stability, its ability to benefit from varied economic cycles and its potential for long-term growth.

International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.

While analyzing NFLX's performance for the last quarter, we found some intriguing trends in revenues from its overseas segments that Wall Street analysts commonly model and monitor.

The company's total revenue for the quarter amounted to $12.56 billion, showing rise of 13.4%. We will now explore the breakdown of NFLX's overseas revenue to assess the impact of its international operations.

Decoding NFLX's International Revenue TrendsAsia-Pacific generated $1.51 billion in revenues for the company in the last quarter, constituting 12% of the total. This represented a surprise of -0.54% compared to the $1.52 billion projected by Wall Street analysts. Comparatively, in the previous quarter, Asia-Pacific accounted for $1.51 billion (12.3%), and in the year-ago quarter, it contributed $1.31 billion (11.8%) to the total revenue.

Latin America accounted for 12.6% of the company's total revenue during the quarter, translating to $1.58 billion. Revenues from this region represented a surprise of +5.34%, with Wall Street analysts collectively expecting $1.5 billion. When compared to the preceding quarter and the same quarter in the previous year, Latin America contributed $1.5 billion (12.2%) and $1.31 billion (11.8%) to the total revenue, respectively.

During the quarter, Europe, Middle East and Africa contributed $4.03 billion in revenue, making up 32.1% of the total revenue. When compared to the consensus estimate of $4.04 billion, this meant a surprise of -0.18%. Looking back, Europe, Middle East and Africa contributed $4 billion, or 32.6%, in the previous quarter, and $3.54 billion, or 31.9%, in the same quarter of the previous year.

Anticipated Revenues in Overseas MarketsThe current fiscal quarter's total revenue for Netflix, as projected by Wall Street analysts, is expected to reach $12.92 billion, reflecting an increase of 12.2% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Asia-Pacific is anticipated to contribute 12.1% or $1.56 billion, Latin America 12.5% or $1.61 billion and Europe, Middle East and Africa 32.2% or $4.16 billion.

Analysts expect the company to report a total annual revenue of $51.42 billion for the full year, marking an increase of 13.8% compared to last year. The expected revenue contributions from Asia-Pacific, Latin America and Europe, Middle East and Africa are projected to be 12.1% ($6.23 billion), 12.3% ($6.34 billion) and 32.2% ($16.57 billion) of the total revenue, in that order.

Key TakeawaysRelying on global markets for revenues presents both prospects and challenges for Netflix. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.

In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.

At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short-term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.

Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.

At present, Netflix holds a Zacks Rank #3 (Hold). This ranking implies that its near-term performance might mirror the overall market movement. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Assessing Netflix's Stock Price Movement in Recent TimesThe stock has witnessed a decline of 10.9% over the past month versus the Zacks S&P 500 composite's an increase of 0.6%. In the same interval, the Zacks Consumer Discretionary sector, to which Netflix belongs, has registered an increase of 1%. Over the past three months, the company's shares saw a decrease of 25.4%, while the S&P 500 increased by 5%. In comparison, the sector experienced a decline of 6.2% during this timeframe.

With its stock already down 44% from last June's peak, shareholders clearly weren't optimistic heading into Thursday evening's release of its second-quarter numbers. Yet somehow, streaming giant Netflix (NFLX 1.41%) still managed to disappoint investors. Shares fell more than 8% in Thursday's after-hours trading, in fact, not so much in response to its second-quarter results, but in response to the company's Q3 2026 guidance. Further stoking the selling was the word that, going forward, Netflix will report its total viewing hours only once per year. The bears took that ball and ran with it, so to speak, deterring any would-be buyers waiting for a sign that it's time to dive in.

This post-earnings stumble may well be the last of the sell-off, though. Indeed, if you can stomach the risk and the inevitable volatility, the stock is finally a buy.

The quarter that was, and the one that won't be Netflix turned $12.56 billion worth of revenue into a per-share profit of $0.80 for the three months ending in June. That's up 13.4% and 11.1%, respectively, and essentially in line with analysts' expectations.

However, the quarter currently underway isn't apt to be quite as healthy as initially expected. The company's calling for a top line of $12.86 billion to turn into per-share earnings of $0.82. That's better than the year-earlier comparisons of $11.51 billion and $0.59. But, those projections are also shy of analyst estimates of $13 billion and $0.84 per share. Following the company's recent (and questionable) decision to reinstate free trials after a six-year hiatus, investors were quick to conclude that the streaming giant is really struggling.

And in some regards, it is struggling. For instance, growth is clearly slowing down, forcing investors to price in a factor they've never needed to before.

Image source: Getty Images.

What's not being priced in, however, is how the entire dynamic surrounding Netflix -- and for that matter, the entire streaming industry -- has changed. This company remains the name to beat in this business, as well as the business's best bet for investors even if it's not evident in the most closely watched numbers.

Plenty of strategic options for the unexpectedly profitable outfit The changes have been so slow that they've almost been forgotten. This includes the saturation of the once-uncontested market, the mainstreaming of advertisements before and even during programming, and the addition of select live events side-by-side with a library of on-demand content. These evolutions apply to most of the major names in the business, including Netflix, which expects its still-nascent advertising business to generate on the order of $3 billion in revenue this year.

That's not a huge number, but this is high-margin revenue that might otherwise be foregone if an ad-supported option weren't available.

Perhaps more than anything, though, Netflix's streaming business has evolved from being an unprofitable growth engine to being a cash cow. A little over 27% of last quarter's revenue was turned into net income despite industrywide challenges, while 12% of its sales turned into free cash flow, reaching profitability levels that, before the COVID-19 pandemic took hold, investors weren't fully sure the company would ever achieve.

Notably, it's more profitable than most of its competition, giving Netflix more operational options than its rivals.

And there are plenty of examples of such initiatives. For instance, the company is easing its way into the video gaming market, offering over 120 different free-to-play mobile games. It's not a major profit center yet, but it could eventually become one, and is a retention tool in the meantime. Meanwhile, although management explicitly said it's not happening yet, co-CEO Greg Peters did concede during Thursday's earnings call that "free [free-to-watch ad-supported video] is something that we're going to continue to consider," perhaps providing it with another means of monetizing its home-grown entertainment content. Whispers also recently began circulating that the company is considering partnering with a traditional live/cable TV outlet to improve engagement. And, although the company ultimately dropped its bid to acquire rival Warner Bros. Discovery in February, it's not ruling out all future dealmaking. Last month, it announced plans to acquire Radford Studio Center in Los Angeles, providing another venue for creating more of its own TV shows and films.

The fact that Netflix is considering ideas outside of its wheelhouse to leverage its brand name is encouraging. The fact that it isn't blindly pouncing on all of them at any cost is equally encouraging.

Not yesteryear's Netflix, not yesteryear's stock These are admittedly uncharted waters for investors that spent the past 24 years pricing Netflix shares largely based on reported metrics like revenue and subscriber growth. Now those numbers aren't quite as impressive... if they're reported at all. The market needs to find a new lens through which to judge the company's (and the stock's) value, like profits. The shift's clearly been a tough one to digest.

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With shares now halved over the course of the past year thanks to the post-earnings stumble, however, there's a strong case to be made that the old paradigm and its supporters are now finally being flushed out. From here, profits could -- and should -- become the top focus, and Netflix hasn't had any problem producing plenty of those of late.

That's not apt to change in the foreseeable future, either. The company's been pretty smart about spending on new initiatives like the introduction of ad-supported subscriptions, being careful not to create too much costly disruption too quickly. Or, in the case of its abandoned effort to acquire Warner, it wisely walked away when the total price tag started getting too big. Smart.

Analysts are optimistic anyway, even if most investors haven't been. Before Thursday's earnings report, the majority of them rated NFLX stock as a strong buy, with a consensus price target of $112.77, which is 65% above the ticker's current price. Even if disappointing third-quarter guidance dials back some of that optimism, Wall Street still says Netflix shares are considerably undervalued.

Just remain braced for continued volatility and above-average risk if you dive in. People are still struggling to wrap their mind around how Netflix isn't the numbers-focused kind of stock it used to be. Now the big number to watch is the bottom line, with more subjective-based factors like partnerships and innovation likely to push and pull on its share price.

Despite the streaming giant falling 24.22% year-to-date (YTD) and crashing 6.87% to $68.95 in the last week, Wall Street has remained largely bullish on Netflix (NASDAQ: NFLX) stock.

The latest example of the trend came on July 20 when Phillip Securities analyst Helena Wang retained her previous $110 12-month price target for NFLX shares but, within a generally optimistic note, upgraded the equity’s rating to ‘Buy.’

According to the Wall Street expert, Netflix boasts resilient pricing power, expanding advertising monetization, industry-leading profitability, and healthy membership: all factors backing the view that the streaming giant’s shares are worth investing in, especially at the current and attractive valuation.

Analysts predict Netflix stock price in the next 12 months Zooming out, institutional analysts have generally remained optimistic toward NFLX equity despite its stock market woes. Overall, Netflix shares are regarded as a ‘Moderate Buy’ with 22 experts giving it a positive recommendation and 9 proving ‘Neutral.’

 At press time on July 20, there are no NFLX stock ‘Sell’ ratings, and the asset is, on average, expected to rally 38.61% to $95.57 in the next 12 months, per the data Finbold retrieved from TipRanks.

Wall Street sets Netflix stock price for the next 12 months. Source: TipRanks Furthermore, only three prominent analysts rated Netflix as a ‘Hold’ following the latest earnings report. Still, despite the bullshness, multiple Wall Street experts reduced their 12-month stock price targets despite retaining ‘Buy’ recommendations. 

Piper Sandler’s Thomas Champion was responsible for the steepest of these reductions when he dropped his forecast from $115 to $85  – from a 66.79% predicted rally to 23.28% – on July 17.

Netflix stock price performance Meanwhile, investors proved nowhere near as favorable toward Netflix stock as Wall Street in the aftermath of the earnings. Specifically, the equity collapsed 12.28% from 74.35% to $65.24 shortly after the July 16 closing bell, and even the subsequent recovery took it no higher than $68.95.

Netflix stock price one-week chart. Source: Google At press time in the July 20 pre-market, NFLX shares are an additional 0.81% down and changing hands at $68.39.

Featured image via Shutterstock

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Dimensional Fund Advisors LP lowered its holdings in Netflix, Inc. (NASDAQ:NFLX – Free Report) by 5.4% during the first quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The firm owned 15,142,522 shares of the Internet television network’s stock after selling 871,107 shares during the quarter. Dimensional Fund Advisors LP owned 0.36% of Netflix worth $1,455,603,000 at the end of the most recent quarter.

Several other hedge funds have also recently added to or reduced their stakes in NFLX. Checchi Capital Advisers LLC increased its stake in shares of Netflix by 875.7% in the fourth quarter. Checchi Capital Advisers LLC now owns 31,143 shares of the Internet television network’s stock valued at $2,920,000 after buying an additional 27,951 shares in the last quarter. Contravisory Investment Management Inc. lifted its position in Netflix by 837.2% during the 4th quarter. Contravisory Investment Management Inc. now owns 111,380 shares of the Internet television network’s stock worth $10,443,000 after buying an additional 99,496 shares in the last quarter. BNC Wealth Management LLC grew its holdings in Netflix by 991.3% during the 4th quarter. BNC Wealth Management LLC now owns 41,229 shares of the Internet television network’s stock worth $3,866,000 after acquiring an additional 37,451 shares during the last quarter. Crew Capital Management Ltd grew its holdings in Netflix by 1,021.9% during the 4th quarter. Crew Capital Management Ltd now owns 9,031 shares of the Internet television network’s stock worth $847,000 after acquiring an additional 8,226 shares during the last quarter. Finally, Family Capital Trust Co increased its position in Netflix by 20,869.5% in the 4th quarter. Family Capital Trust Co now owns 27,470 shares of the Internet television network’s stock valued at $2,576,000 after acquiring an additional 27,339 shares in the last quarter. Institutional investors and hedge funds own 80.93% of the company’s stock.

Insider Activity In other news, insider David A. Hyman sold 5,722 shares of the stock in a transaction on Tuesday, May 5th. The stock was sold at an average price of $88.08, for a total value of $503,993.76. Following the transaction, the insider owned 316,100 shares of the company’s stock, valued at $27,842,088. This represents a 1.78% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Spencer Adam Neumann sold 9,253 shares of the firm’s stock in a transaction on Thursday, May 7th. The stock was sold at an average price of $88.95, for a total value of $823,054.35. Following the completion of the transaction, the chief financial officer owned 73,787 shares in the company, valued at $6,563,353.65. This represents a 11.14% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders have sold 899,839 shares of company stock worth $80,141,661. Corporate insiders own 1.24% of the company’s stock.

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

Positive Sentiment: Some analysts remain bullish, arguing Netflix still has strong long-term upside from margin expansion, advertising growth, and new engagement-driven content formats. Mark Mahaney Reiterates Buy on Netflix Positive Sentiment: Supportive commentary highlighted Netflix’s AI, ads, short-form video, and gaming strategy as potential growth catalysts for monetization and engagement. Ad Engagement & Content Opportunities Offer Bullish Edge for NFLX Neutral Sentiment: Several analysts cut price targets but mostly kept buy/overweight or hold ratings, signaling lower near-term expectations rather than a full thesis break. Laura Martin Maintains Buy on Netflix Negative Sentiment: Netflix’s weaker Q3 outlook and reduced engagement disclosure sparked concern that growth is slowing and management is becoming less transparent with investors. Netflix third-quarter earnings forecast falls shy of Wall Street expectations Negative Sentiment: Coverage across the market emphasized the post-earnings selloff, citing a revenue miss, soft guidance, and investor worries about future growth and competition. U.S. Chip Stocks Extend Slide; Netflix Tumbles on Growth Warning Netflix Price Performance Shares of NASDAQ NFLX opened at $68.95 on Monday. The firm has a market capitalization of $290.33 billion, a PE ratio of 21.70, a price-to-earnings-growth ratio of 0.88 and a beta of 1.52. The company has a current ratio of 1.14, a quick ratio of 1.41 and a debt-to-equity ratio of 0.39. Netflix, Inc. has a 1 year low of $65.08 and a 1 year high of $126.71. The firm’s 50-day moving average is $80.15 and its 200-day moving average is $86.85.

Netflix (NASDAQ:NFLX – Get Free Report) last issued its quarterly earnings results on Thursday, July 16th. The Internet television network reported $0.80 EPS for the quarter, topping the consensus estimate of $0.79 by $0.01. The company had revenue of $12.56 billion during the quarter, compared to analysts’ expectations of $12.58 billion. Netflix had a net margin of 28.22% and a return on equity of 40.02%. Netflix’s revenue was up 13.4% on a year-over-year basis. During the same quarter in the previous year, the company earned $0.72 EPS. Equities analysts expect that Netflix, Inc. will post 3.6 EPS for the current year.

Analyst Ratings Changes A number of equities analysts have weighed in on NFLX shares. Needham & Company LLC reaffirmed a “buy” rating on shares of Netflix in a research note on Friday, April 17th. Erste Group Bank cut shares of Netflix from a “buy” rating to a “hold” rating in a research note on Monday, April 27th. Rosenblatt Securities set a $75.00 price target on shares of Netflix and gave the company a “neutral” rating in a report on Friday. Wolfe Research restated an “outperform” rating and issued a $107.00 price objective on shares of Netflix in a research report on Friday, April 17th. Finally, Moffett Nathanson reduced their price objective on Netflix from $120.00 to $115.00 and set a “buy” rating on the stock in a report on Wednesday, June 17th. Two equities research analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating and sixteen have assigned a Hold rating to the company. According to data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average price target of $103.97.

Get Our Latest Stock Analysis on NFLX

Netflix Company Profile (Free Report)

Netflix, Inc (NASDAQ: NFLX) is a global entertainment company that provides subscription-based streaming of films, television series, documentaries and other video content. Founded in 1997 by Reed Hastings and Marc Randolph and headquartered in Los Gatos, California, the company began as a DVD-by-mail rental service and introduced streaming video in 2007. Netflix later expanded into producing and distributing original programming, beginning notable original hits in the 2010s, and now operates a content production and distribution ecosystem alongside its licensing activity.

The company’s primary product is its on-demand streaming service, which can be accessed on a wide range of internet-connected devices and delivered through a suite of apps and web platforms.

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Mark Mahaney z Evercore ISI si myslí, že „sentiment na Netflixu je nejslabší za poslední čtyři roky“. Řekl to v komentáři ke zveřejněným výsledkům této společnosti s tím, že se čekalo zklamání, a to se také dostavilo. Dobrým signálem také není to, když nějaká firma omezuje dostupnost informací, a to dělá Netflix, když nepodává tolik čísel ohledně vývoje sledovanosti.

Mahaney si myslí, že Netflixu sílí konkurence, jednak ze strany jiných streamovacích platforem a také ze strany rostoucí popularity krátkých videí. Dochází tak k pokračujícímu tlaku na pokles ARPU, tedy průměrného příjmu ze zákazníka, a tlaku na marže pramenícímu z intenzivnější konkurence. Netlix na druhou stranu dokazuje, že je schopný nabízet mimořádně zajímavý obsah a analytik jej a jeho akcii stále považuje za velmi kvalitní. S tím, že obrat v sentimentu a fundamentu ale zřejmě přijde až příští rok.

Mohl by Netflix udělat pro růst akcie „něco dramatičtějšího“? Na tuto otázku analytik odpověděl, že svým způsobem tak činí větším zaměřením na živé přenosy sportovních událostí. A zopakoval, že „v následujících 3 – 6 měsících bude akcie pod tlakem, ale má nastartováno na skok v roce 2027.“ Rich Greenfield z Lightshed Partners na CNBC řekl, že investoři u Netflixu začali předpokládat, že jako společnost už nebude dál růst. „Zpochybňují jeho růstový potenciál… Už dva lidé mi psali, že Netflix je mediální společností starého typu.“

Podle tohoto experta se situace může změnit jen časem tím, že Netflix zase dokáže růst. Investoři ale podle něj momentálně trpělivost nemají, ačkoliv firma tvrdí, že je stále v rané fázi svého rozvoje. Greenfield si přitom myslí, že bude klesat počet konkurentů kvůli různým fúzím, ale „nic z toho nyní nemá velký význam“. I on se však domnívá, že omezení informací není pozitivním krokem, „investoři si pak myslí, že společnost něco skrývá.“

Ross Gerber z Gerber Kawasaki Wealth and Investment Management na Bloombergu řekl, že Netflix udělal velký pokrok v oblasti sportu, ale zřejmě tu nechce dál masivně expandovat. K tomu dodal: „Streamovací byznys nyní dosáhl určitého maxima, je tu dost platforem, hodně obsahu, hodně konkurence. Není to chyba Netflixu, ale konkurence je silná… Dobrou nabídku má třeba HBO.“ Příležitostí pro Netflix by mohly být jednak hry a také distribuce obsahu do kin. To by mohlo generovat „miliardy dolarů ročně“, nikdo by přitom podle něj neměl problém s tím, že na samotnou platformu by se filmy dostaly později.

Gerber podle svých slov nedávno akcie nakoupil, protože se domnívá, že management Netflixu je velmi dobrý a „jen se musí dostat přes současné náročné období“. Má dostatek kapitálu, aby expandoval a „budeme ho dál sledovat my i naše děti… Odhadujeme jeho hodnotu výrazně výš, než je současná cena akcie.“ Minulost také podle Gerbera ukazuje, že firma se s problémy dokázala vždy vypořádat.

Netflix (NFLX 7.26%) stock is down more than 26% year to date, putting it on pace for its worst annual performance since 2022. The company released its second-quarter earnings report after the closing bell on July 16, and in response, the market sent the stock down by 7.3% on July 17. Revenue marginally missed analysts' consensus expectations, while management's guidance was consistent with its previous outlook.

Wall Street's negative reaction was more about the expectations game than the health of the business. Here's why Netflix is still in a solid competitive position in streaming.

Image source: The Motley Fool.

Member engagement and growing profits are what matter The Q2 report showed key metrics still pointing to healthy member engagement. Netflix reported that viewing hours grew by 2% in the first half of 2026, a slight acceleration from the 1.5% increase in 2025. What's notable about that improvement is that during the first half of this year, Netflix was at times competing for audience attention with the Winter Olympics and the FIFA World Cup.

Advertising growth is another revealing indicator of Netflix's reach and member engagement. It's on track to deliver $3 billion in ad revenue this year, doubling its 2025 total. Netflix is seeing strong advertiser interest in its live sports content. Investments in artificial intelligence-powered tools should support growth in this lucrative new revenue stream.

Full-year guidance was within management's previous range. The company did narrow its revenue forecast to $51 billion to $51.4 billion, which would amount to a 13% to 14% increase over 2025.

Netflix is one of the most profitable businesses in the entertainment industry. Its operating margin reached 33.4% in Q2, and the company expects a 31.5% margin for 2026, with year-over-year operating income growth of more than 20%. Growth in advertising could be a catalyst for further improvements on this front over the long term.

The company's profitability is extremely valuable, as it enables it to keep producing quality entertainment and expand its content variety, including video podcasts, creator content, games, and live events. This helps it retain its existing subscribers and attract new ones, supporting its long-term growth.

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Nothing has changed with the investment thesis The sharp sell-off in the stock may be frustrating for shareholders, but it's important to remember it was driven by a minuscule revenue miss of just $22.6 million. Wall Street analysts were expecting Q2 revenue to be $12.58 billion, but Netflix reported $12.56 billion. That doesn't mean the business is worth 7.3% less than it was the day before.

This seems to be an overreaction by traders rather than anything wrong with the business itself. Netflix simply can't do anything to please Wall Street right now. Last year, it posted two consecutive quarters of 17% revenue growth in Q3 and Q4, yet the stock continued to slide through the end of the year.

What hasn't changed is that Netflix is a highly profitable streaming leader that is expected to generate $12.5 billion in free cash flow this year. A lower stock price means investors who buy in now are getting more value per share. The stock entered the quarter trading at a price-to-free-cash-flow multiple of 27, and now trades at a multiple of roughly 25.

Moreover, analysts are still modeling for the company's earnings to grow at an annualized rate of over 20% in the next several years. This obviously reflects management's long-term outlook for improving margins, particularly as it continues to build its advertising revenue stream.

Nothing has changed the long-term investment case for Netflix. It is still generating solid viewer engagement, churning out high margins and free cash flow, and reinvesting in content to deliver more value to subscribers. This positive cycle is why Netflix remains a solid investment.

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SummaryNetflix has fallen into a steep decline from its 2025 highs, with valuation multiples dropping to just 20x forward earnings, reflecting market skepticism about its future growth optionalities.Despite such pessimism, NFLX maintains solid fundamentals: rising free cash flow margins, global subscriber scale, and disciplined content spending imperatives.Growth optionalities in advertising, live TV, live sports, and video podcasting are valuable but understated. These levers are still nascent and need time to materialize.I believe the market has discounted its execution risk and growth slowdown far too much for what it's worth.With NFLX now priced like an average S&P 500 stock, I believe investors should make full use of the buying opportunity before the pessimism reserve reverses later.Looking for a helping hand in the market? Members of Ultimate Growth Investing get exclusive ideas and guidance to navigate any climate. Learn More » Getty Images

Netflix: Investors Are Pricing in Engagement Growth Stagnation Netflix stock (NFLX) is now undergoing a pretty significant digestion phase as investors are now trying to understand whether the engagement growth has truly peaked and could enter

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