Netflix terminated a Warner Bros. acquisition and paid a $2.8 billion fee. Full-year free cash flow guidance was raised to $12.5 billion. An ad business is on pace to reach $3 billion in 2026, supported by strong sign-ups and growth in advertiser clients. Despite record cash flow, the stock has fallen, with shares down sharply over the past year and modestly year to date. Sentiment is pressured by consecutive EPS misses and high beta, which increases exposure to macro volatility. Additional headwinds include a Brazilian tax overhang and intense competition. A valuation path to $350 by 2027 depends on substantial multiple expansion from current levels.
"Ad revenue is on track to double to $3 billion, the ad-supported tier drove 60%+ of sign-ups in ads markets, and advertiser count jumped 70% to 4,000+ clients."
Read at 24/7 Wall St.
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