Naughty Flicks

Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuNetflix ‘s shares took a hit following its latest quarterly report, falling about 7% early Wednesday. But the stock is likely to bounce back over the long run, so investors should buy the dip, many Wall Street analysts said. On Tuesday, Netflix posted earnings of 87 cents per share for the third quarter versus the 82 cents per share expected by analysts polled by LSEG. Revenue came in at $12.87 billion for the same period, in line with the Street’s consensus estimate. More ominously, Netflix also lowered its revenue outlook for the current year, with the streaming platform now expecting to rake in $51.1 billion for the full 12 months — a 13% increase over the year prior, and lowered its advertising revenue forecast. Netflix previously offered a revenue forecast in the range of $51 billion to $51.4 for 2026. Shares of Netflix sold off following those downward revisions, but in reaction several Wall Street analysts told investors to look past the the latest decline and instead buy the dip. “At below 20x EPS, we view valuation as undemanding for a company with more than 300 million paying subscribers globally,” Bank of America analyst Jessica Reif Ehrlich wrote in a report Wednesday. Ehrlich rates Netflix a buy with a $90 price target, implying 31% upside over the coming 12 months. “NFLX has a strong balance sheet (~1x gross leverage) which is driving significant share buybacks (~$4.8bn in 3Q) and leaves ample opportunity for M & A,” she said. Others also said to look past the latest numbers. “We believe the market’s reaction was overly punitive, although directionally fair given the guidance cut,” Barclays analyst Kannan Venkateshwar said Wednesday in a note to clients. “Overall … absolute growth remains healthy, [but the] valuation debate is likely to remain centered on growth second derivatives.” Netflix is struggling to scale its advertising, although pricing and membership trends remain strong, Venkateshwar said. More positively, Netflix should benefit from more sports inventory this year, in addition to efforts to bundle its offerings with those of other streaming services. Here’s what else the Street is saying about Netflix. JPMorgan: Overweight rating “While we understand investor concerns on engagement and the timeframe for Peter Rice to make an impact on the content slate, we are encouraged by [U.S.-Canada] trends accelerating — w/ U.S. revenue growth even stronger — and churn improving in the U.S. and globally Y/Y. We continue to believe NFLX has healthy multi-year growth headroom as it accounts for ~5% of TV view share globally and has penetrated < 45% of its broadband household [total addressable market].” Bank of America: Overweight “Netflix has been a battleground stock for much of 2026, with investor concerns centered on slowing engagement, moderating revenue growth and the potential [mergers and acquisitions] activity. Recent mgmt. changes, to some, have validated some of these underlying concerns. While results and guidance were largely in line, the quarter did little to change the narrative. Management reiterated its commitment to double-digit revenue growth and margin expansion, although we anticipate investors will remain focused on evidence of stronger content momentum.” Morgan Stanley: Overweight “NFLX continues to grow revs double digits (+11-12% y/y) in what is more balanced growth across members & pricing. Advertising is tracking ~$300mn light for the year (ad product capabilities/ integrations, delays should be months, not years). [Reductions in force] & content chief changes show decisive action.” BMO: Outperform “Encouragingly, membership growth remains solid, supported by healthy subscriber retention across regions as churn improved YoY. We remain positive on the long-term monetization opportunity and see the near-term advertising slowdown as buildout pain rather than a structural growth challenge.” Goldman Sachs: Buy “Taking a step back, we see a topline growth and forward free cash flow per share narrative (supported by buyback levels as well) that leaves us Buy rated and increasingly seeing the risk/reward on the shares (from after-hours levels) as attractive over a 12-month time horizon. We remain constructive on our fundamental work that a combination of themes (user/member growth, pricing power (to address value delivered to members), a rising ad supported revenue stream, a balance of content investments, capital returns and a high bar for M & A) remain central to the NFLX thesis.” Jefferies: Buy “Results were broadly consistent with cons and are unlikely to be thesis-changing. While we expect bears to highlight the slight revenue guide-down on Advertising, we were encouraged to hear that trends in membership and pricing remain healthy.”Read More