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After hitting an all-time closing high of $133.91 on June 30, 2025, Netflix (NFLX -1.79%) shares are down roughly 50% following the streaming giant's third-quarter earnings report. The stock's multiple compression, meanwhile, finally makes it look like a buy, despite slightly slowing revenue growth.

The video streaming company reported its third-quarter results after the closing bell on Oct. 20, which led the stock to continue its descent. The stock has been basically flat over the past five years. Let's dig into Netflix's results and prospects to see why it looks like a buy.

NFLX Netflix$65.85-$1.20 (-1.79%)

NASDAQ · As of 4:00 PM ET 10/23/26

Making changes
It was probably pretty obvious before Netflix's report that the streaming giant wouldn't post blockbuster earnings, since it fired its chief content officer and announced its largest layoff since 2022 days before the report. It hired former Walt Disney executive Peter Rice for the role, whom the company praised for his expertise in "talent relations."

While Netflix has said its international content has been performing well, it has struggled recently to deliver big blockbuster shows in the U.S. that tend to get people talking and draw in new subscribers. In fact, there has been a narrative that the company is trying to appeal to too broad a user base (something-for-everyone shows), which has been hindering it from developing its next blockbuster. In a competitive market for talent, Netflix thinks Rice can help make it the place top creative talent wants to work with in the future.

By pivoting back to creator-friendly, quality-focused development, Netflix hopes to deliver more entertainment value to its members. It is also looking to leverage technology, continue to improve its adtech stack, and improve monetization. As such, it plans to launch ad tier subscriptions in 15 new countries next year, including nine in EMEA (Europe, the Middle East, and Africa), two in South America, and New Zealand.

For Q3, Netflix saw solid growth, with revenue increasing 12% (11% in constant currencies) to $12.87 billion. Adjusted earnings per share (EPS) surged 49% to $0.87. Analysts on average had been looking for EPS of $0.82 on revenue of $12.87 billion, according to estimates compiled by LSEG.

Revenue growth was relatively consistent across regions. U.S. and Canada revenue rose 11% to $5.6 billion, while EMEA revenue grew 11%, or 9% in constant currencies, to $4.1 billion. Latin America revenue increased by 17%, or 12% excluding currency, to $1.6  billion, while the Asia-Pacific region saw revenue rise 12%, or 15% in constant currencies, to $1.5 billion.

Looking ahead, management guided for Q4 revenue growth of 12%, or 11% excluding currency, to $13.4 billion, led by membership growth, price increases, and ad revenue. For the full year, it slightly reduced its forecast to $51.1 billion, representing 13% growth (12% excluding currency). This was due to a slower rollout of certain ad capabilities, which reduced its full-year ad forecast from $3 billion to $2.7 billion.

Image source: The Motley Fool.

Why the stock looks like a buy
At a forward price-to-earnings ratio (P/E) of around 17 times analysts' 2027 estimates, Netflix is now at a valuation that is starting to look attractive and can draw the interest of GARP (growth at a reasonable price) investors. Revenue growth remains solid, and the company has the opportunity to accelerate it by making a slight shift in its content strategy.

International markets are already performing well, with strong growth in places like India and other parts of Asia. Meanwhile, the U.S. market just needs some more hit shows. Longer term, increased live events and sports, and the rollout of ad tiers to more countries should help drive its still-nascent ad business.

With the stock attractively valued and the company actively looking to turn around its fortunes, the stock looks like a buy at these levels.

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

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

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

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

View Our Latest Stock Analysis on NFLX

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

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

About Netflix (Free Report)

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

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

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A Q3 2026 earnings beat on October 20 hasn't repaired the damage at Netflix (NASDAQ:NFLX | NFLX Price Prediction), where softer advertising and revenue guidance overshadowed the headline numbers and sent the stock lower.

Carnegie Investment Counsel lessened its position in Netflix, Inc. (NASDAQ:NFLX – Free Report) by 45.3% during the third quarter, according to the company in its most recent 13F filing with the SEC. The fund owned 14,002 shares of the Internet television network’s stock after selling 11,617 shares during the quarter. Carnegie Investment Counsel’s holdings in Netflix were worth $974,000 as of its most recent filing with the SEC.

Several other institutional investors have also recently bought and sold shares of NFLX. American Capital Advisory LLC raised its holdings in shares of Netflix by 0.8% in the first quarter. American Capital Advisory LLC now owns 13,990 shares of the Internet television network’s stock valued at $1,345,000 after purchasing an additional 109 shares during the last quarter. CWS Financial Advisors LLC boosted its holdings in Netflix by 3.2% during the first quarter. CWS Financial Advisors LLC now owns 3,612 shares of the Internet television network’s stock worth $347,000 after purchasing an additional 112 shares during the last quarter. Warner Group LLC boosted its holdings in Netflix by 2.2% during the first quarter. Warner Group LLC now owns 5,230 shares of the Internet television network’s stock worth $503,000 after purchasing an additional 114 shares during the last quarter. Financial Avengers Inc. grew its position in Netflix by 9.8% in the first quarter. Financial Avengers Inc. now owns 1,290 shares of the Internet television network’s stock valued at $124,000 after purchasing an additional 115 shares in the last quarter. Finally, PAX Financial Group LLC grew its position in Netflix by 2.5% in the first quarter. PAX Financial Group LLC now owns 4,847 shares of the Internet television network’s stock valued at $466,000 after purchasing an additional 116 shares in the last quarter. Institutional investors own 80.93% of the company’s stock.

Analysts Set New Price Targets Several brokerages have issued reports on NFLX. Guggenheim lowered their price target on shares of Netflix from $80.00 to $78.00 and set a “buy” rating on the stock in a research note on Wednesday. Pivotal Research restated a “hold” rating and set a $65.00 price objective (down from $70.00) on shares of Netflix in a research note on Wednesday. Loop Capital reduced their price objective on shares of Netflix from $115.00 to $95.00 and set a “buy” rating for the company in a research note on Friday, July 24th. DZ Bank restated a “buy” rating on shares of Netflix in a report on Monday, July 20th. Finally, Wolfe Research downgraded Netflix from an “outperform” rating to a “peer perform” rating in a research report on Thursday. Three investment analysts have rated the stock with a Strong Buy rating, thirty-four have issued a Buy rating, seventeen have assigned a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and a consensus target price of $89.59.

Get Our Latest Research Report on NFLX Netflix Stock Performance Shares of NASDAQ NFLX opened at $67.05 on Friday. The company has a current ratio of 1.07, a quick ratio of 1.14 and a debt-to-equity ratio of 0.43. The company has a market capitalization of $279.19 billion, a P/E ratio of 19.38, a P/E/G ratio of 0.92 and a beta of 1.62. Netflix, Inc. has a 12 month low of $64.10 and a 12 month high of $116.73. The stock has a 50 day moving average of $74.52 and a 200-day moving average of $79.74.

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

Insider Buying and Selling In other news, CFO Spencer Neumann sold 9,248 shares of the stock in a transaction dated Monday, August 10th. The shares were sold at an average price of $75.79, for a total value of $700,905.92. Following the transaction, the chief financial officer directly owned 73,787 shares of the company’s stock, valued at $5,592,316.73. This represents a 11.14% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Theodore Sarandos sold 105,850 shares of the firm’s stock in a transaction dated Monday, August 3rd. The stock was sold at an average price of $73.03, for a total transaction of $7,730,225.50. Following the sale, the chief executive officer owned 206,266 shares of the company’s stock, valued at approximately $15,063,605.98. This represents a 33.91% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last three months, insiders sold 179,045 shares of company stock valued at $13,132,194. 1.24% of the stock is currently owned by insiders.

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

Positive Sentiment: Investors are treating the sell-off as a potential buying opportunity. Netflix beat third-quarter EPS expectations, generated $12.87 billion in revenue, and increased operating income 34.6% year over year. Several analysts—including UBS, JPMorgan, Bank of America, and TD Cowen—retained positive ratings despite lowering price targets. Stock Market Today, Oct. 22: Netflix Rises as Investors Capitalize on Post-Earnings Sell-Off Positive Sentiment: Netflix’s valuation has become more attractive after the decline, with investors emphasizing rising profits, more than 300 million subscribers, pricing power, and potential long-term growth from advertising, live events, and international content. The company’s buybacks are substantial, although management appears to follow a systematic rather than opportunistic repurchase strategy. The Truth About Netflix’s Massive Stock Buybacks Neutral Sentiment: Management continues to target double-digit revenue growth and expects advertising revenue to grow more than 80% in 2026. Netflix is investing in original programming, theatrical releases, live sports, and events such as NFL games, but executives acknowledge that viewer-hour growth and content execution need to improve. Negative Sentiment: The principal pressure is Netflix’s fourth-quarter outlook: EPS guidance of $0.67 trails the $0.73 consensus, while projected revenue of $13.4 billion is below the $13.5 billion estimate. Full-year revenue guidance was also slightly reduced. ETFs in Focus as Netflix Shares Tumble Amid Q3 Earnings Beat, Guidance Cut Negative Sentiment: Netflix cut its 2026 advertising-revenue forecast from approximately $3 billion to $2.7 billion, reinforcing concerns about slower growth, delayed ad execution, weaker engagement, and competition from YouTube, TikTok, and lower-cost streaming options. Multiple analysts consequently lowered price targets, while Needham downgraded the stock to Hold. Why Netflix Stock Dropped Today Netflix Company Profile (Free Report)

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

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

See Also Five stocks we like better than Netflix Is Texas Instruments Setting Up for Its Next Big Breakout? Pegasystems’ Q3 Miss Exposed the Problem Standing Between AI and Cash Flow Lam Research’s Earnings Beat Wasn’t the Real Story—Its 2027 Outlook Was Tesla’s Flying-Car Hype Hits an Earnings Reality Check

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Adams Diversified Equity Fund Inc. reduced its position in shares of Netflix, Inc. (NASDAQ:NFLX – Free Report) by 30.4% in the third quarter, according to its most recent filing with the SEC. The fund owned 146,520 shares of the Internet television network’s stock after selling 64,000 shares during the quarter. Adams Diversified Equity Fund Inc.’s holdings in Netflix were worth $10,195,000 at the end of the most recent reporting period.

Other institutional investors and hedge funds have also recently modified their holdings of the company. BlackRock Inc. bought a new stake in Netflix in the second quarter worth $24,902,221,000. Bank of New York Mellon Corp purchased a new stake in Netflix in the 2nd quarter worth about $1,906,482,000. Legal & General Group Plc purchased a new stake in Netflix in the 2nd quarter worth about $1,886,526,000. Mitsubishi UFJ Asset Management Co. Ltd. bought a new stake in Netflix in the second quarter worth about $1,481,303,000. Finally, Assenagon Asset Management S.A. lifted its stake in Netflix by 194.9% in the third quarter. Assenagon Asset Management S.A. now owns 16,111,438 shares of the Internet television network’s stock worth $1,121,034,000 after purchasing an additional 10,647,803 shares during the last quarter. 80.93% of the stock is owned by hedge funds and other institutional investors.

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

Positive Sentiment: Investors are treating the sell-off as a potential buying opportunity. Netflix beat third-quarter EPS expectations, generated $12.87 billion in revenue, and increased operating income 34.6% year over year. Several analysts—including UBS, JPMorgan, Bank of America, and TD Cowen—retained positive ratings despite lowering price targets. Stock Market Today, Oct. 22: Netflix Rises as Investors Capitalize on Post-Earnings Sell-Off Positive Sentiment: Netflix’s valuation has become more attractive after the decline, with investors emphasizing rising profits, more than 300 million subscribers, pricing power, and potential long-term growth from advertising, live events, and international content. The company’s buybacks are substantial, although management appears to follow a systematic rather than opportunistic repurchase strategy. The Truth About Netflix’s Massive Stock Buybacks Neutral Sentiment: Management continues to target double-digit revenue growth and expects advertising revenue to grow more than 80% in 2026. Netflix is investing in original programming, theatrical releases, live sports, and events such as NFL games, but executives acknowledge that viewer-hour growth and content execution need to improve. Negative Sentiment: The principal pressure is Netflix’s fourth-quarter outlook: EPS guidance of $0.67 trails the $0.73 consensus, while projected revenue of $13.4 billion is below the $13.5 billion estimate. Full-year revenue guidance was also slightly reduced. ETFs in Focus as Netflix Shares Tumble Amid Q3 Earnings Beat, Guidance Cut Negative Sentiment: Netflix cut its 2026 advertising-revenue forecast from approximately $3 billion to $2.7 billion, reinforcing concerns about slower growth, delayed ad execution, weaker engagement, and competition from YouTube, TikTok, and lower-cost streaming options. Multiple analysts consequently lowered price targets, while Needham downgraded the stock to Hold. Why Netflix Stock Dropped Today Wall Street Analysts Forecast Growth NFLX has been the topic of several recent analyst reports. UBS Group set a $90.00 price target on Netflix in a report on Wednesday. The Goldman Sachs Group set a $84.00 price target on shares of Netflix in a report on Wednesday. HSBC lowered Netflix from a “buy” rating to a “hold” rating and lowered their target price for the stock from $96.00 to $76.00 in a report on Tuesday, September 22nd. Wolfe Research cut Netflix from an “outperform” rating to a “peer perform” rating in a research report on Thursday. Finally, DZ Bank reiterated a “buy” rating on shares of Netflix in a report on Monday, July 20th. Three 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 two have given a Sell rating to the stock. Based on data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus target price of $89.59. Get Our Latest Stock Analysis on Netflix

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

Netflix Trading Up 3.1% Shares of NASDAQ:NFLX opened at $67.05 on Friday. The business’s 50-day moving average is $74.52 and its 200 day moving average is $79.74. Netflix, Inc. has a 1 year low of $64.10 and a 1 year high of $116.73. The firm has a market capitalization of $279.19 billion, a P/E ratio of 22.20, a P/E/G ratio of 0.92 and a beta of 1.62. The company has a debt-to-equity ratio of 0.43, a current ratio of 1.07 and a quick ratio of 1.14.

Netflix (NASDAQ:NFLX – Get Free Report) last released its quarterly earnings results on Tuesday, October 20th. The Internet television network reported $0.87 EPS for the quarter, beating analysts’ consensus estimates of $0.82 by $0.05. The company had revenue of $12.87 billion during the quarter, compared to analysts’ expectations of $12.87 billion. Netflix had a return on equity of 42.69% and a net margin of 29.69%. The firm’s revenue was up 11.9% compared to the same quarter last year. During the same period last year, the business posted $0.59 earnings per share. On average, research analysts predict that Netflix, Inc. will post 3.58 earnings per share for the current fiscal year.

Netflix Profile (Free Report)

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

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

Read More Five stocks we like better than Netflix Is Texas Instruments Setting Up for Its Next Big Breakout? Pegasystems’ Q3 Miss Exposed the Problem Standing Between AI and Cash Flow Lam Research’s Earnings Beat Wasn’t the Real Story—Its 2027 Outlook Was Tesla’s Flying-Car Hype Hits an Earnings Reality Check

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Image: Shutterstock

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Cathie Wood might not have the following that she once did when her flagship fund, ARK Innovation ETF, more than doubled in 2020, but investors still keep track of her moves.

Ark Invest, her investment company, is the rare fund manager that discloses its moves on a daily basis, and Wood has always been open with her thinking and analysis, as she's known primarily for betting on disruptive innovation with stocks like Tesla.

So it was noteworthy that Ark added to its holdings of Netflix (NFLX +3.09%) on Wednesday, after the leading streamer delivered a disappointing third-quarter earnings report the night before, showing the company continues to struggle with weak engagement and slowing growth.

Wood's ARK Next Generation Internet ETF (Nasdaq: ARKW) bought 18,783 shares of the stock on Wednesday, or approximately $1.2 million worth of the stock.

Cathie Wood. Image source: Getty Images.

Wood's history with NetflixMost investors believe that Netflix's days as a disruptor are over, as it has become the incumbent in streaming, with legacy media companies now challenging it. The traditional cable ecosystem is quickly becoming a relic of the past.

Wood seems to have made a similar conclusion. Ark first invested in Netflix in 2016, and Ark accumulated its stake through 2020. As the business seemed to mature in 2021 and then briefly declined in 2022, Ark cut its stake and eventually exited the position by the third quarter of that year.

However, attracted by the company's launch of an advertising tier and its push into live entertainment, Ark reopened its position in Netflix last October.

The recent purchases, especially following the 5% slide on Wednesday, fit with Ark's strategy of buying out-of-favor growth stocks.

NFLX Netflix$67.05+$2.01 (+3.09%)

NASDAQ · As of 4:00 PM ET 10/22/26

Netflix's problems are real. Total viewing hours on the platform rose just 2% in the first half of the year, and it's losing viewing share to competitors like YouTube. According to Nielsen, its share of the U.S. audience fell from 8.8% to 7.8% in the year ended last July, while other streamers gained ground.

It also just cut its 2026 advertising revenue guidance from $3 billion to $2.7 billion due to technical challenges with its ad product, and the company has pulled back from sharing certain metrics with investors, such as subscriber growth. It also said it would only share engagement data once a year, which could lead to wild swings in the stock when it reports that number.

Overall, Netflix could certainly head lower in the near-term as the trend of slowing growth is set to continue at least into the fourth quarter. However, over the long term, the stock looks like a good bet to recover as the company should find its way back to putting out hits, and it just brought on a new Chief Content Officer, Peter Rice, to help on that front.

Buying the stock here with the price-to-earnings ratio at around 21 should pay off over the long term, though investors shouldn't expect a quick recovery, given the challenges facing the company.

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

Summary

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

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

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

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

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

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

Netflix stock rose 3% Thursday morning.

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

Click for the complete disclosure

Netflix just posted a strong earnings beat, then watched its stock sink to near 52-week lows as investors fixated on one number in the outlook. The real story is what the market may be pricing in wrong.

Our 24/7 Wall St. price target for Netflix (NASDAQ:NFLX | NFLX Price Prediction) is $78.99 over the next 12 months. Shares traded at $65.28 at midday on October 21. That places the target about 21.0% above the current quote.

The model’s own 15.27% upside figure was measured from the $68.52 close. Our rating is buy, and our confidence is high.

Metric
Value

Current Price
$65.28

Price Target from 24/7 Wall St.
$78.99

Upside/Downside
21.0%

Rating
BUY

Confidence Level
90%

The market is pricing in short-term frustration over ad schedule and U.S. engagement. Meanwhile, the long-term engine of pricing, membership growth and advertising continues compounding. We see the opportunity in the gap between sentiment and fundamentals.

Earnings Beat Collides With a Softer Forecast Near 52-Week Lows
Netflix fell 4.97% in today’s session. Shares are down 7.35% over the past week, 9.07% over the past month and 30.38% year to date. The stock sits just above its 52-week low of $65.08 and roughly 44% below its $116.73 high. Q3 revenue rose 11.85% to $12.87 billion, in line with estimates. EPS of $0.87 beat the $0.8229 consensus, and operating income climbed 37.26%.

The outlook is what spooked investors. Netflix cut its 2026 ad revenue forecast to about $2.7B from roughly $3B. It also guided to a Q4 operating margin of 26%, which includes a drag from headcount cuts.

Co-CEO Ted Sarandos acknowledged that Netflix “could do better”. Management responded by buying back 63.9M shares for $4.8B in Q3, its largest buyback quarter ever.

Why Bulls See $112.90 Within Reach
Netflix still expects full-year revenue of $51.1B (+13% YoY) and a 31.5% operating margin. The ad tier expands to 15 new countries starting March 2027, and management expects the ads business to grow over 80% this year even after the cut.

Live NFL games, a new licensing deal with Walt Disney (NYSE:DIS) and 24% growth in India view hours add more growth drivers. Of the analysts following Netflix, 35 rate it a Buy or Strong Buy. Our one-year bull case reaches $112.90.

Risks That Could Keep Netflix Range-Bound
Netflix admitted its U.S. slate is “just not growing as fast as it could”. Ad product delays and heavy competition for viewers’ time are real risks, and free cash flow guidance fell to $12B from $12.5B.

A real estate transaction drove the cash flow cut, and the margin drag comes from one-time layoffs. Co-CEO Greg Peters described the ad delay as “a modest short-term hit for a better long-term strategic position.” Our bear case still lands at $72.86.

Netflix Trades Between Disney and Spotify on Valuation

Company
Forward P/E
Operating Margin (TTM)

Netflix
19x
33.4%

Spotify
29x
13.7%

Disney
14x
19.3%

Spotify (NYSE:SPOT) is the closest pure-play subscription streamer, and its revenue rose 13.9% last quarter compared with Netflix’s 13.4%. Spotify earns a far lower margin yet trades at a much richer multiple.

Disney is Netflix’s main competitor and now also a content partner. It looks cheaper on earnings, but its revenue rose only 6.8%. Netflix offers growth on par with Spotify, the highest margin in the group and a mid-range multiple. Measured against these peers, our target looks reasonable, and arguably conservative.

Netflix Price Prediction 2026-2030
Our 24/7 Wall St. price target of $78.99 and our buy rating rest on 90% confidence. The deciding factor is a margin-rich business trading near its 52-week low while buying back stock at a record pace.

The bull case strengthens if ad monetization picks up after the 2027 expansion. The thesis weakens if U.S. engagement continues stalling into next year.

Our model projects where Netflix could trade if current growth trends and market conditions hold.

Year
Price Target from 24/7 Wall St.

2026
$68.80

2027
$76.86

2028
$87.70

2029
$97.58

2030
$101.57

The projections depend on Netflix continuing to execute its current strategy. Faster ad monetization would lift results well above this path, while weaker U.S. engagement could hold the stock back.

Contact [email protected] for any questions or corrections.

Netflix (NASDAQ:NFLX) said its core strategy remains centered on exclusive original programming, global distribution, product discovery and monetization, while live events, licensed content and selected partnerships are intended to broaden the service rather than replace its main growth engine.

During the company’s third-quarter 2026 earnings interview, co-CEO Ted Sarandos said roughly 95% of Netflix’s spending and nearly all of its revenue remain focused on its core entertainment offering. He described live programming, third-party content and other newer initiatives as tightly managed expansions of that strategy.

“We want to be the must-have entertainment service, the first one members check for a great series or a great film, and the last service they would ever cancel,” Sarandos said. Live Events and Content Partnerships Sarandos said live events such as the Canelo-Crawford fight, NFL programming and MLB-related events can stand out in an increasingly crowded entertainment market. He said such programming can attract members, support advertising revenue and add value for existing subscribers.

The company is also continuing to supplement its originals with licensed programming. Sarandos cited recent agreements involving Sony, Disney, Universal and other suppliers, as well as a partnership with French broadcaster TF1 that brings a full network offering onto Netflix in France.

Co-CEO Greg Peters said Netflix is pleased with the early results from the TF1 integration, which he said has added local French programming while keeping the TF1 experience distinct within the Netflix service. Viewing of TF1 programming on Netflix has increased each month, Peters said, and early testing indicates that TF1 engagement is incremental to the platform.

Netflix could pursue similar arrangements where they fit the needs of both parties, Peters said, though he added that the company has “nothing to announce today” regarding potential add-on subscription services or other integrations.

On licensing, Sarandos reiterated that original and exclusive programming remains the anchor of Netflix’s offering. But he said the company sees value in second-run titles that complement its originals. He pointed to the recent Disney agreement, which brought the Ice Age films and other Disney programming to Netflix. All five Ice Age films reached Netflix’s top 10 after arriving on the service, he said.

Sarandos also highlighted a new content licensing agreement with Globo in Brazil, which he called Netflix’s largest agreement with the Brazilian company. The agreement includes programming such as the Oscar-winning film I’m Still Here and the International Emmy-winning telenovela India – A Love Story.

Engagement, U.S. Execution and Leadership Changes Peters said global engagement remains healthy and pointed to retention and churn as the clearest measures of the value Netflix delivers. Third-quarter churn improved year over year both globally and in the United States, he said, and was better than the company forecast. Recent price changes, including in the U.S., have performed in line with Netflix’s past pricing actions and expectations, according to Peters.

Netflix reported particular strength in the Asia-Pacific, Latin America and Europe, the Middle East and Africa, where local titles are contributing to engagement and business growth. In India, Peters said third-quarter viewing hours rose 24% on an absolute basis, while revenue increased nearly 20% year over year.

While U.S. engagement remains solid, Sarandos said the company believes its domestic content performance can improve. Netflix has named Peter Rice as chief content officer following the departure of Bela Bajaria, whom Sarandos credited with helping build Netflix’s international content organization and expanding its programming into new categories.

Sarandos said Rice’s experience spanning television networks, studios, streaming, film and live sports could help Netflix improve execution, particularly in the U.S. Netflix is not planning a fundamental change in content strategy, he said, but wants more U.S. titles that can become global “home runs.”

The company highlighted a forthcoming slate including additional seasons of The Diplomat, Emily in Paris, Bridgerton and Wednesday, as well as the film The Further Mis-Adventures of Cliff Booth. Looking ahead to 2027, executives cited projects including Narnia, Charlie and the Chocolate Factory, Here Comes the Flood and Grown Ups 3, along with NFL games and the Women’s World Cup in the U.S. and Canada.

Theatrical Releases and Workforce Changes Sarandos said Netflix remains a streaming-first company but is expanding theatrical releases selectively based on the individual film, audience and filmmaker. The company expects to release about 30 films theatrically this year, similar to last year’s level.

Its approach now includes different release patterns for specialty films and larger family titles. Sarandos said Netflix is using a 47-day theatrical window for the Spanish-language film La Bola Negra, while The Further Mis-Adventures of Cliff Booth will receive an IMAX release four weeks before its Netflix debut. The company has also announced 45-day windows and wide theatrical releases for Narnia: The Magician’s Nephew and Charlie vs. the Chocolate Factory.

Netflix has begun publicly reporting box-office grosses for its theatrical titles. Sarandos said La Bola Negra opened with more than $69,000 per-screen, which he said was the second-highest per-screen average ever for a non-English-language film in the U.S., behind Parasite.

Separately, Peters addressed recent headcount reductions, describing them as part of an effort to maintain discipline in allocating resources. He said rapid growth and changing market conditions can leave companies overinvested in some areas or create opportunities to alter operating structures.

“We do not take these decisions lightly,” Peters said, adding that Netflix believes it must make trade-offs in support of members, partners, employees, investors and long-term growth.

Advertising and 2027 Growth Goals CFO Spence Neumann said Netflix expects member growth, pricing and advertising to remain its three primary revenue drivers. While the company is not yet providing full-year 2027 guidance, Neumann said Netflix’s financial objectives are unchanged: sustain double-digit revenue growth, expand margins and increase free cash flow.

Netflix’s advertising business is expected to grow more than 80% in 2026, Peters said, though the company is currently behind its own aggressive target for the year. He attributed the shortfall to delays in rolling out some advertising products and partner integrations.

Peters said Netflix considers the near-term setback acceptable if it produces a stronger long-term position. The company continues to prioritize new advertising formats, full-funnel optimization, measurement tools and reporting capabilities. Demand for inventory remains strong, he said, and the range of advertisers using the platform is expanding.

Netflix plans to expand its ad tier into 15 additional countries next year. Peters said average revenue per membership for the ad tier remains below the standard non-ad tier, but the gap is narrowing as the company improves advertising technology, expands demand sources and increases ad-plan membership.

In mature markets such as the U.S., U.K. and Australia, Netflix expects pricing and advertising to account for a larger share of future growth. In less-penetrated markets including India, Indonesia and Colombia, member growth is expected to be the more significant revenue driver, Peters said.

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

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

Netflix remains a buy, despite recent stock underperformance driven by multiple contractions rather than deteriorating fundamentals. Q3 results showed 11.8% YoY revenue growth, 37% operating income growth, and strong free cash flow, with operating margins expected to rise further. Engagement concerns persist, but churn and retention metrics remain healthy, and international content performance, notably in India, demonstrates growth potential.

Netflix stays a buy even as market pessimism appears elevated, but a double bottom signal highlights the potential for a recovery. Growth is clearly slowing, especially in key US and EMEA segments, but management expects double-digit revenue growth next year. Growth story not broken yet. NFLX's core platform strength remains its original content and large subscriber base, with advertising and international expansion providing incremental upside.

Netflix slashed its ad revenue outlook, shed 30% this year, and watched competitors gain while it fell, yet one Wall Street analyst still sees a near-doubling from here. What would have to go right to make that call pay off?

Netflix (NASDAQ:NFLX | NFLX Price Prediction) trades at $65.04. Wall Street’s average price target is $90.75, which implies 39.5% upside.

Netflix runs a global paid streaming service. Its global audience is approaching 1 billion, and it has a pending all-cash acquisition of Warner Bros. Discovery (NASDAQ:WBD) at $27.75 per share. Wall Street wants to know whether ads, pricing and live events can keep revenue growing at double digits while the deal adds debt. The most bullish analyst on the stock is BMO Capital Markets’ Brian Pitz, whose $125.00 target stands 92% above the current price.

Ad Revenue Cut Overshadows an Earnings Beat
Advertising did the most damage. The stock cut its 2026 ad revenue outlook to about $2.70 billion from roughly $3.00 billion because new ad products are rolling out more slowly than planned. The stock fell 5.31% in the latest session and 11.34% over the past month. It is down 30.63% this year, a drop of more than 30% that leaves it near its 52-week low of $64.10.

The quarter itself was solid. Revenue rose 11.8% to $12.87 billion, slightly missing expectations. GAAP EPS of $0.87 beat the $0.82 estimate. The guidance disappointed: Netflix expects a fourth-quarter operating margin of 26.0%, down from 34.6% in the third quarter, partly because of costs tied to roughly 1,000 job cuts. It also lowered its 2026 free cash flow forecast to about $12.0 billion from $12.5 billion.

The selling hit Netflix alone. The S&P 500 was essentially flat over the same month, at -0.04%.

51 Analysts Still Back Ads, Pricing and Buybacks
Of the 51 analysts covering the stock, 7 rate it Strong Buy, 28 rate it Buy, 15 say Hold and 1 says Sell. Their earnings forecasts have barely changed. The average 2027 EPS estimate is 3.8087, compared with 3.8291 90 days ago. Targets have come down, though. BMO cut its target to $125.00 from $135.00, and UBS’s John Hodulik is near $100.00.

BMO’s case rests on three things: ads supported by live events, pricing power, and free cash flow that pays for buybacks. Management made a similar case. The ad business is “still growing over 80% this year,” Netflix plans ad tiers in 15 new countries in 2027, and price increases have “gone well.” Netflix bought back $4.8 billion of stock in the quarter and has $22.3 billion of authorization left.

The next checkpoint comes in January, when Netflix gives its 2027 guidance. At a forward P/E of about 19x, the stock already prices in some doubt. Price targets are opinions, and several of them are falling.

Disney and Spotify Held Up While Netflix Fell
Netflix fell alone. Disney (NYSE:DIS) rose 7.29% over the past month to $111.82. Its average target of $126.58 implies 13.2% upside. Analysts are firmly bullish, with 6 Strong Buy, 23 Buy, 3 Hold and 1 Sell. Their targets point to far less upside than Netflix’s.

Spotify (NYSE:SPOT) gained 1.66% over the month to $524.80. Its target of $600.53 implies 14.4% upside. Analyst ratings break down as 8 Strong Buy, 24 Buy, 7 Hold and zero Sell.

Netflix has by far the largest gap to its target in the group. Its competitors are mostly priced near where analysts think they belong. Netflix is the one with a big gap between the market and Wall Street.

A 30% Slide While the S&P 500 Gained 13%
Netflix is down 30.63% this year. The S&P 500 is up 13.38%. Over the past year, Netflix lost 47.61% while the index gained 15.18%.

At $65.04, the stock is below its 50-day average of $74.85 and its 200-day average of $82.65. The 51 analysts covering it set an average target of $90.75, or 39.5% upside.

Netflix Looks Cheap If Ads Catch Up in 2027
Things could improve if the ad tier launches in the new countries on schedule, January’s 2027 guidance supports double-digit revenue growth, and buybacks continue alongside the Warner Bros. deal. If that happens, a stock trading at about 19x forward earnings could move back toward the low $90s.

The stock could prove a value trap if U.S. viewing keeps sliding, ad delays carry into 2027, and the Warner Bros. debt pressures buybacks. Management admitted U.S. execution needs work. The CEO said: “We do need better execution in the U.S.”

The outlook is balanced. Earnings estimates have held steady, and the price drop has made the valuation more reasonable. Still, a 92% gain needs everything to go right, and the consensus target is the more realistic marker to keep an eye on.

Contact [email protected] for any questions or corrections.

Shares of Netflix (NFLX -5.31%) closed at around $69 on Oct. 20, down about 27% in 2026. If the year ended at that price, it'd be the stock's worst calendar year since 2022, when shares slid 51%.

And it got worse after the bell. Following the streaming giant's third-quarter results, the stock dropped about 6% in after-hours trading to around $65. That was under its lowest close of the year.

But the business behind the stock looks nothing like it did in 2022. Its profits are still rising fast, even as the stock price falls.

Image source: Netflix.

Profits are still climbingIn 2022, Netflix's trouble was the business itself. The company lost around 1 million paid memberships in the second quarter of that year alone, and revenue grew just 9% year over year in the period.

This year's different. Showing how profitable the streaming service has become, Netflix's third-quarter revenue rose 12% year over year to $12.9 billion, while its operating income jumped 37%. Its operating margin widened to 34.6%, up from 28.2% a year earlier. And earnings per share jumped 49% to $0.87.

Granted, these comparisons flatter the quarter a little. Last year, Netflix booked an expense of around $619 million linked to a dispute with Brazilian tax authorities, which weighed on its operating margin in the third quarter of 2025.

Leaving out that charge, Netflix's operating income would still have climbed about 15%, and its operating margin would still have widened by about a percentage point.

Netflix also spent $4.8 billion buying back 63.9 million shares in the third quarter, its biggest quarter for repurchases ever, and free cash flow rose about 8% to $2.9 billion.

Growth hasn't bottomed yetThe problem is that revenue growth is still cooling. Netflix sees fourth-quarter revenue of around $13.4 billion, up 12% year over year, which would put full-year revenue at $51.1 billion. If that outlook holds, growth will have slowed for four straight quarters since revenue rose around 18% in the fourth quarter of 2025.

Advertising is part of that. Management now expects around $2.7 billion of ad revenue for 2026, down from about $3 billion, because some new ad features are rolling out slower than planned.

Yet the ad business is still small. Even at the lower target, ad revenue would be just around 5% of Netflix's total for the year. And the $300 million gap is under 1% of the revenue the company now expects for 2026.

To me, the home market is the bigger worry. Revenue in the U.S. and Canada region, which was around 44% of the third quarter's total, climbed 11% year over year. Growth there rose a little from the second quarter -- though it was well below the 17% the region saw in the third quarter of 2025.

"The U.S. is also working. It's just not growing as fast as it could or as fast as we'd like," said co-CEO Ted Sarandos during the company's third-quarter earnings call.

After all, in a mature market like the U.S., advertising arguably needs to do more of the growing. So a slower ad rollout might matter more than $300 million makes it look.

Is the stock cheap enough now?The slide has at least made the stock cheaper. Based on its Oct. 20 close and the average analyst estimate for 2027 earnings per share, Netflix's price-to-earnings ratio was around 18. The after-hours fall pushed it closer to 17.

NFLX Netflix$65.04-$3.65 (-5.31%)

NASDAQ · As of 4:00 PM ET 10/21/26

For the S&P 500 (^GSPC +0.58%) overall, FactSet pegs the number at around 19, using earnings estimates for the next 12 months.

Put another way, Netflix now trades at roughly the same price-to-earnings ratio as the broader market. And that's for a business whose revenue is still climbing by double digits, with an operating margin of almost 35% last quarter.

So, is Netflix stock finally a buy? I think shares are worth considering at this price. Even after stripping out last year's tax charge, the company's operating income rose around 15% in the third quarter. And it's buying back its own stock at a record pace.

But the growth rate hasn't stopped dropping, and the ad business just slipped behind its own plan. That's why I'd consider building a position slowly. It may take a few more quarters to see where growth settles.

Shares of Netflix (NFLX -5.31%) fell more than 5% on Wednesday after the streaming leader cut its sales forecast for its increasingly crucial advertising business.

Image source: Netflix.

Slowing growthNetflix's revenue rose 12% year over year to $12.9 billion in the third quarter. That marked a significant deceleration from the 17% growth the streaming giant delivered in the third quarter of 2025.

Netflix said membership additions, price hikes, and the expansion of its advertising platform drove the gains.

NFLX Netflix$65.04-$3.65 (-5.31%)

NASDAQ · As of 4:00 PM ET 10/21/26

Notably, Netflix's operating margin improved to 34.6% from 28.2% in the year-ago quarter. However, the company said these profitability gains were mostly due to the timing of certain expenses.

All told, Netflix's earnings per share jumped 47% to $0.87. That bested Wall Street's estimates, which had called for per-share profits of $0.82.

Fierce competitionInvestors, however, appeared to focus more on Netflix's guidance. Management now expects full-year ad revenue of roughly $2.7 billion, down from a prior forecast of $3 billion.

Netflix's less expensive ad-supported plans are seen as a way for it to attract increasingly budget-conscious consumers and fend off intensifying competition from Alphabet's YouTube and other streaming rivals.

Netflix is reportedly laying off about 6% of its workforce to invest more in content and technology, according to CNBC. The company also recently replaced its chief content officer, Bela Bajaria, with former Disney executive Peter Rice.

But judging by the stock's performance today, investors aren't sure these moves will be enough to bolster Netflix's competitive position.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Netflix, and Walt Disney. The Motley Fool has a disclosure policy.

One member of Congress has been buying Netflix Inc. (NASDAQ:NFLX) shares in larger amounts than other members over the last year. With the streaming company hitting a two-year low for its shares Wednesday, here's a look at the current losses.

Laurene Powell Jobs bought into David Ellison's blockbuster media merger at the same price the Ellison family paid, but the stock has since collapsed and her stake tells a very different story about who can afford to wait.

Shares in Netflix Inc. (Nasdaq: NFLX) have fallen to a more than a two-year low after the streaming giant posted its Q3 2026 results yesterday.

Despite hitting Wall Street’s projected revenue target of nearly $12.9 billion for the quarter, an update on the company’s increasingly critical ad business dampened investor optimism, sinking the stock with it. Here’s what you need to know.

What’s happened?Yesterday, Netflix announced its results for its third quarter of fiscal 2026. Unfortunately for the company, those results—and Netflix’s guidance—were somewhat of a mixed bag.

There was good news: Revenue for the quarter totaled $12.87 billion, representing 11.8% year-over-year growth.

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The company’s diluted earnings per share also reached 87 cents. As noted by CNBC, this means Netflix hit the revenue target investors were expecting and exceeded EPS expectations by five cents per share.

However, there was also plenty of news that gave investors pause—and that has caused the stock to drop significantly in premarket trading today.

What did Netflix project?For the fourth quarter, Netflix said it expects revenue to grow by about 11.5% to $13.44 billion. Double-digit growth is nothing to sneeze at, but unfortunately for Netflix, that revenue forecast comes in under the $13.51 billion that Wall Street was expecting, notes TipRanks. 

Explore TopicsinvestingmarketsNetflixstocksstreaming tv

Netflix is struggling to attract new subscribers and boost engagement as it tries to find its next big film or TV hit. Helena Wang, Phillips Securities research analyst, discusses how the streaming giant can find growth through new ad-backed offerings and why Netflix is pushing on TV, film, live events and sports all at once in order to be the first place for content people choose and the last subscription they cancel.

On its third-quarter 2026 earnings call, held on Oct. 20, 2026, Netflix (NFLX -5.29%) reaffirmed its core investment priorities while advancing its advertising technology and content partnerships. The streaming company's ability to maintain pricing power, deepen global member engagement, and expand cash flow will shape its value over the next five years. Three things management said stand out.

Image source: The Motley Fool.

1. Core Content Engine Captures 95% of Total Capital SpendDespite exploring live sports and short-form video, management concentrates capital where it earns the highest return. Original series and films retain subscriber attention and protect pricing power across every global market.

All that said, it is really important to remember, roughly 95% of our spend and nearly all of our revenue is focused on that core, where we see a long runway for future growth.
-- Ted Sarandos, co-Chief Executive OfficerBuilding an internal advertising technology platform has caused temporary rollout delays, but management refuses to compromise its long-term data advantages for short-term revenue gains. The advertising tier continues to grow by over 80% this year while closing the gap in average revenue per membership (ARM), which measures total revenue divided by the average number of paying members.

Getting to the integration model that we want sometimes takes a bit more work with our partners, but we strongly believe that a modest short-term hit for a better long-term strategic position is a good ultimate trade-off.
-- Greg Peters, co-Chief Executive Officer3. Aggregating Local Networks Broadens Distribution and Protects Member RetentionIntegrating third-party television networks, such as TF1 in France, expands content variety without requiring substantial upfront licensing costs. Broadening the platform through strategic partnerships strengthens member retention, which measures the percentage of subscribers who keep their paid accounts.

Delivering on that desire over many, many years has been a goal, and I'd say it's been the primary driver of our industry-leading subscriber reach and retention.
-- Greg Peters, co-Chief Executive OfficerNFLX Netflix$65.06-$3.64 (-5.29%)

NASDAQ · As of 12:32 PM ET 10/21/26

Looking AheadView hour growth is accelerating across international markets, and management is openly taking steps to sharpen execution in the U.S. Global distribution reach, proprietary adtech, and expanding partnerships provide structural momentum.

Our financial objectives are unchanged. We look to sustain double-digit revenue growth, we look to expand margins, and we look to increase free cash flow.
-- Spence Neumann, Chief Financial OfficerAs the subscription video-on-demand (SVOD) market matures, long-term advantage rests on superior monetization and global reach.

Our strategy is unchanged and it has always been and it continues to be, to combine best-in-class entertainment with industry-leading discovery, global distribution, and the best possible monetization.
-- Ted Sarandos, co-Chief Executive OfficerThis is an experimental type of content. Notice something we could improve on? Drop us a comment below!

The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

Netflix shares NFLX fell in trading on Wednesday after its third-quarter earnings exceeded expectations, but a weaker revenue forecast and concerns about slowing engagement raised questions about its growth prospects.

The streaming company reported adjusted earnings of 87 cents per share on revenue of $12.9 billion for the fiscal third quarter, compared with analysts' expectations of 82 cents per share on the same revenue, according to FactSet.

However, Netflix forecast fourth-quarter revenue of $13.4 billion, slightly below Wall Street's estimate of $13.5 billion.

The stock dropped 4.48% on Wednesday after the results.

Netflix shares have declined 27% in 2026, reflecting investor concerns about slowing growth, competition and the company's content strategy.

Investors are increasingly focused on whether Netflix can sustain viewer engagement as competition intensifies across the streaming industry.

Disney+, Amazon Prime Video and Alphabet's YouTube compete for viewers' attention, while the merger of Paramount Skydance and Warner Bros.

Discovery has brought Paramount+ and HBO Max under one corporate umbrella.

Netflix also announced in July that it would publish its engagement report annually rather than twice a year, instead of twice annually, adding to investor scrutiny of its viewing trends.

In its shareholder letter on Tuesday, Netflix acknowledged concerns about growth in viewing hours.

The company said member responses to its 2026 price increases were consistent with previous changes and expectations, which it viewed as evidence that engagement remained healthy.

Netflix also said it wanted to accelerate growth in viewing hours.

Its strategy includes investing in original content exclusive to the platform, alongside live events intended to attract subscribers.

However, live events can generate short-term viewership without necessarily encouraging the sustained viewing associated with television series.

The company's outlook has prompted differing assessments from analysts, particularly as attention shifts towards its growth and profitability in 2027.

Morningstar described the share-price decline as the best buying opportunity for Netflix shares in years, maintaining a narrow economic moat assessment and an $80 price target.

That target implied more than 16% upside from the stock's last closing price.

The research firm identified the planned expansion of Netflix's advertising-supported tier as a potential growth driver.

The company intends to introduce the tier in 15 additional international markets in 2027, including nine EMEA countries, Colombia, Peru and New Zealand.

Morningstar also highlighted lower-than-expected customer churn and the potential for further US price increases and advertising growth.

Needham, however, downgraded Netflix to Hold from Buy, citing decelerating foreign-exchange-neutral revenue growth.

Growth slowed from 14% in the first quarter to 12% in the second and 11% in the third.

The firm expects revenue growth to fall into single digits in fiscal 2027 and raised concerns about the company's content slate and competitive position relative to YouTube.

Other firms also reduced their price targets.

Bernstein lowered its target to $80 from $95 while maintaining an Outperform rating.

Rosenblatt cut its target to $71 from $75 and retained Neutral, while Barclays reduced its target to $65 from $70 and maintained Equal Weight.

Subscription business remains a source of supportDespite concerns about growth, several analysts continued to see strengths in Netflix's core business.

JPMorgan maintained an Overweight rating, saying the subscription business remained healthy despite pressure on the shares from lower revenue expectations and uncertainty about 2027 growth and margins.

Bank of America said Netflix's valuation remained undemanding for a global platform with more than 300 million subscribers, double-digit revenue growth, expanding margins and rising capital returns.

Goldman Sachs also maintained that the longer-term double-digit growth outlook remained intact, although it identified US content engagement as a key factor for the stock.

Morgan Stanley pointed to continued double-digit revenue growth and viewed the workforce reductions and content leadership change as signs of decisive action.

Netflix (NFLX) posted a double miss on earnings, a report that has investors shaping their outlook on the streaming giant as companies like Skydance (SKYD) pose a larger threat to the company's bottom line. Marley Kayden takes investors through the key metrics in the report and readjusted price targets from analysts.

It seems so obvious now. Netflix (NFLX -5.44%) shares opened lower on Wednesday after the company posted disappointing financial results. The top dog among premium video streaming services exceeded its summertime forecast for the third quarter, but guidance remains the dagger gift that keeps on shivving.

All you had to do was pay attention. Like a scripted piece on the platform with layered foreshadowing, the signs were there for all to see:

Netflix laid off 6% of its workforce earlier this month.
A few key executives -- including its chief content officer and head of film -- left in the aftermath of the workforce reductions.
Netflix stock had initially declined following each of its five previous quarterly reports.

Image source: Getty Images.

The sixth time's the harm
A quick overview of the results is in order. Heading into the third quarter, Netflix's own outlook back in July called for an 11.7% increase in revenue. It would've been its weakest year-over-year growth in three years, which naturally played a part in the stock taking a step back after that financial report.

Revenue would climb 11.8% to $12.87 billion, a sliver ahead of its own guidance. The bottom line was even better. Earnings rose 44% to $0.87 per share. It was only targeting a 36% increase to $0.82 per share. There were some asterisks. Revenue would have risen just 11% on a foreign exchange-neutral basis. The improvement in margin was partly due to the timing of big-ticket expenses.

It was ultimately a beat on both ends of the third quarter's income statement, but Green Day was right about waking up when September ends. A beat without a raise is like lowering the roof on your convertible car as you're driving into a stormy horizon. The only thing that matters behind the wheel is where you're going, and Netflix's fourth-quarter read isn't promising.

Netflix now sees revenue for the new quarter rising 11.5% to $13.4 billion. It will obviously be its worst showing in more than three years. It would also be the fourth consecutive quarter of decelerating year-over-year growth. The bottom line isn't the rock star it was in the third quarter. With expense tailwinds becoming headwinds, net income is expected to rise just 15% to $0.67 a share. Analysts were holding out for a profit of $0.73 a share.

NFLX Netflix$64.96-$3.74 (-5.44%)

NASDAQ · As of 12:28 PM ET 10/21/26

Nobody wants this
Netflix stock hit a two-year low on Wednesday. The shares have shed almost half of their value over the past year. Growth investors have moved on. Value investors are still wondering if this is a classic value trap.

I'm still holding. I learned my lesson a long time ago. I've owned Netflix for 24 years. I bought it when it was a broken IPO, months after its springtime 2002 market debut. I made the mistake of selling some of my shares on the upticks, celebrating bunt singles when I should've kept swinging for the fences. I made the mistake of selling some of my shares on downticks, only to see Netflix recover from at least two drawdowns of roughly 80% in 2011 and 2022. I am down to my last 1% of my original stake, and not just as a cruel reminder of how much money I would have if I hadn't surrendered the other 99% over the past two dozen years.

Netflix isn't as bad today as the stock chart suggests. As odd as this may sound for this global business that now generates more than half of its revenue internationally, each of its four regions posted double-digit revenue growth in the third quarter. You don't see that kind of symmetry often with a top-line increase just shy of 12%. The stock is now historically cheap. At this morning's open of $64.13, you're buying Netflix for less than 17 times forward earnings.

Cutting ties with the biggest percentage gainer I've ever had doesn't feel right. It's like putting the roof back on my convertible when sunnier skies are on the horizon. Yes, Netflix. I'm still watching.

Netflix Inc. (NASDAQ:NFLX) shares hit new 52-week lows and sit at levels last seen in August 2024 after third quarter financials reported Tuesday failed to win over investors. Analysts are lowering their price targets and see more pain for the streaming giant ahead.

Louisbourg Investments Inc. boosted its stake in Netflix, Inc. (NASDAQ:NFLX – Free Report) by 30.0% during the 3rd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The firm owned 68,089 shares of the Internet television network’s stock after buying an additional 15,726 shares during the period. Louisbourg Investments Inc.’s holdings in Netflix were worth $4,738,000 as of its most recent SEC filing.

Other hedge funds also recently added to or reduced their stakes in the company. Revisor Wealth Management LLC increased its stake in shares of Netflix by 86.9% in the third quarter. Revisor Wealth Management LLC now owns 10,509 shares of the Internet television network’s stock valued at $737,000 after purchasing an additional 4,886 shares during the period. Redwood Family Wealth LLC raised its holdings in shares of Netflix by 2.7% during the third quarter. Redwood Family Wealth LLC now owns 6,247 shares of the Internet television network’s stock valued at $435,000 after buying an additional 166 shares during the last quarter. West Branch Capital LLC boosted its position in shares of Netflix by 5.0% during the third quarter. West Branch Capital LLC now owns 35,100 shares of the Internet television network’s stock worth $2,442,000 after buying an additional 1,679 shares during the period. Bank Pictet & Cie Europe AG boosted its position in shares of Netflix by 52.0% during the third quarter. Bank Pictet & Cie Europe AG now owns 188,806 shares of the Internet television network’s stock worth $13,137,000 after buying an additional 64,617 shares during the period. Finally, 55 North Private Wealth LLC boosted its position in shares of Netflix by 16.3% during the third quarter. 55 North Private Wealth LLC now owns 11,225 shares of the Internet television network’s stock worth $781,000 after buying an additional 1,574 shares during the period. 80.93% of the stock is currently owned by institutional investors.

Insider Buying and Selling at Netflix In related news, Director Richard Barton sold 720 shares of the stock in a transaction on Thursday, September 10th. The stock was sold at an average price of $75.27, for a total value of $54,194.40. Following the completion of the transaction, the director owned 2,460 shares in the company, valued at $185,164.20. This trade represents a 22.64% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Theodore Sarandos sold 27,312 shares of the stock in a transaction on Tuesday, August 4th. The shares were sold at an average price of $73.35, for a total value of $2,003,335.20. Following the completion of the transaction, the chief executive officer owned 178,954 shares of the company’s stock, valued at $13,126,275.90. This trade represents a 13.24% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 179,045 shares of company stock valued at $13,132,194 over the last 90 days. 1.24% of the stock is owned by insiders.

Key Headlines Impacting Netflix Here are the key news stories impacting Netflix this week: Positive Sentiment: Netflix exceeded third-quarter profit expectations, reporting diluted EPS of $0.87 versus the $0.82 consensus estimate. Revenue reached $12.87 billion, operating income rose 37% year over year to $4.46 billion, and operating margin expanded to 34.6%. Netflix Q3 earnings beat Positive Sentiment: Management cited pricing power, controlled churn and strong profitability, while Netflix repurchased approximately $4.8 billion of stock during the quarter. These factors support earnings per share and shareholder returns. Netflix Q3 financial results Positive Sentiment: Some analysts view the sharp decline in the stock and its valuation as creating an attractive entry point if management can restore viewership growth and improve content execution. Netflix is cheap again Neutral Sentiment: Netflix is cutting roughly 1,000 jobs and reorganizing its creative leadership, including changes involving film and content executives. Co-CEO Greg Peters described the layoffs as a difficult tradeoff intended to redirect investment toward longer-term growth, but the restructuring may create near-term execution risk. Netflix layoffs and long-term growth Negative Sentiment: The main pressure on NFLX is its fourth-quarter outlook: revenue is projected at approximately $13.4 billion, below Wall Street expectations, with operating margin expected to fall to 26% as restructuring costs weigh on results. Netflix weak fourth-quarter forecast Negative Sentiment: Netflix reduced its 2026 advertising-revenue forecast to approximately $2.7 billion from $3 billion because advertising-product rollouts are progressing more slowly than expected. The shortfall undermines a key growth narrative. Netflix cuts advertising forecast Negative Sentiment: Revenue growth is expected to slow for a fourth consecutive quarter, while stagnant viewership—particularly in the United States and Canada—and intensifying competition are raising concerns about Netflix’s ability to keep audiences engaged. Netflix viewership and competition concerns Negative Sentiment: The company also lowered its 2026 free-cash-flow outlook to about $12 billion from $12.5 billion, adding to investor concerns that forward momentum is weakening despite the quarterly earnings beat. Analyst Upgrades and Downgrades Several analysts recently commented on the company. Itau BBA Securities lowered their target price on Netflix from $151.40 to $96.00 and set an “outperform” rating on the stock in a research report on Wednesday, August 5th. Rosenblatt Securities reiterated a “neutral” rating and set a $75.00 price target on shares of Netflix in a research report on Friday, October 16th. Oppenheimer set a $85.00 price target on Netflix and gave the stock an “outperform” rating in a research report on Friday, July 17th. China Intl Cap raised Netflix to a “strong-buy” rating in a research note on Tuesday, July 21st. Finally, UBS Group decreased their price target on Netflix from $130.00 to $115.00 and set a “buy” rating for the company in a research note on Friday, July 17th. Three research analysts have rated the stock with a Strong Buy rating, thirty-five have issued a Buy rating, sixteen have assigned a Hold rating and two have issued a Sell rating to the company. According to MarketBeat.com, Netflix has a consensus rating of “Moderate Buy” and an average price target of $93.38.

View Our Latest Report on NFLX

Netflix Price Performance Shares of NASDAQ:NFLX opened at $68.69 on Wednesday. The company has a market capitalization of $286.02 billion, a PE ratio of 21.62, a price-to-earnings-growth ratio of 0.99 and a beta of 1.62. The company has a debt-to-equity ratio of 0.39, a quick ratio of 1.14 and a current ratio of 1.14. The stock has a fifty day moving average of $74.92 and a 200-day moving average of $80.20. Netflix, Inc. has a one year low of $65.08 and a one year high of $124.86.

Netflix (NASDAQ:NFLX – Get Free Report) last issued its earnings results on Tuesday, October 20th. The Internet television network reported $0.87 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.82 by $0.05. The business had revenue of $12.87 billion for the quarter, compared to analysts’ expectations of $12.87 billion. Netflix had a return on equity of 40.02% and a net margin of 28.22%. The company’s quarterly revenue was up 11.9% on a year-over-year basis. During the same period in the previous year, the firm posted $0.59 EPS. As a group, equities analysts anticipate that Netflix, Inc. will post 3.59 EPS for the current fiscal year.

Netflix Profile (Free Report)

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

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

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