"Netflix's recent stumble isn't driven purely by sentiment. The company missed earnings expectations in Q3 2025, reporting $0.59 EPS split-adjusted versus $0.70 expected, a 15.71% shortfall that broke a flawless 2024 beat streak. More concerning, EPS declined sequentially from $0.72 in Q2 2025 to $0.59 in Q3, then dipped further to $0.56 in Q1 2026. That three-quarter slide suggests operational pressure, not a one-time anomaly."
"NBC invested over $8 billion in sports rights for 2026, targeting Olympics and NBA coverage to bolster Peacock against Netflix and Amazon ( NASDAQ: AMZN | AMZN Price Prediction). Disney ( NYSE: DIS), with its $195 billion market cap and 12.8% profit margin, continues building its streaming portfolio backed by Marvel, Pixar, and Star Wars IP. Meanwhile, Paramount Skydance raised its Warner Bros. Discovery bid to $30 per share with a $650 million sweetener, signaling aggressive M&A that could reshape the landscape."
Netflix opened 2026 predicting outperformance versus the S&P 500 but the stock fell 12.32% year-to-date to $82.21, underperforming the broader market by roughly 13 percentage points. The company missed Q3 2025 earnings expectations, reporting $0.59 EPS versus $0.70 expected, and EPS declined across three consecutive quarters to $0.56 in Q1 2026. Competitive intensity is escalating with major sports rights spending and aggressive M&A activity from rivals. Insider sales by the CFO and a director, combined with minimal insider ownership (0.564%), add caution. At the same time, revenue growth, a 24.3% profit margin, 42.8% ROE, and robust free cash flow support the company's fundamentals.
Read at 24/7 Wall St.
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