Netflix Shares Slide After Earnings: is it Time to Buy?

WHO:

24/7 Wall St. - Netflix (NASDAQ: NFLX), co-CEO Ted Sarandos, and CFO Spence Neumann are discussed in the article.

24/7 Wall St. - Sarandos said, “We do need better execution in the U.S.”

24/7 Wall St. - Neumann said, “We want to grow view hours faster. We’re not satisfied.”

24/7 Wall St. - Analysts’ ratings included 7 Strong Buy, 28 Buy, 15 Hold, and 1 Sell.

The Motley Fool - Netflix is a streaming company; the article’s author said the business remained in good shape and considered the stock potentially appealing to patient investors.

WHAT:

24/7 Wall St. - Netflix’s third-quarter earnings per share were $0.87, above the $0.8229 estimate; revenue was $12.874 billion, up 11.85% year over year and just below the $12.878 billion consensus.

24/7 Wall St. - Operating margin increased to 34.6% from 28.2%. Shares fell 5.31% on earnings day; the article also reported a 3.21% rise afterward.

24/7 Wall St. - Netflix reduced its 2026 advertising revenue outlook to about $2.70 billion from $3.00 billion and lowered its fiscal 2026 free-cash-flow forecast to about $12 billion from $12.5 billion. It guided for a 26% fourth-quarter operating margin.

24/7 Wall St. - The company repurchased 63.9 million shares for $4.8 billion in Q3 and had $22.3 billion remaining on its buyback authorization.

24/7 Wall St. - Netflix’s ad business was growing more than 80%; ad tiers were scheduled to launch in 15 additional countries starting March 2027. Latin American revenue rose 17%, and Q3 churn was better than forecast globally and in the U.S.

24/7 Wall St. - The article’s target was $78.99 versus a cited share price of $67.13, implying 17.7% upside; it assigned a Buy rating and 90% confidence. Its bull and bear cases were $112.90 and $72.86, respectively.

24/7 Wall St. - Netflix’s reported valuation figures were 25x P/E, 29x P/FCF, and a 29.49% operating margin. Disney’s were 16x, 19x, and 14.6%; Spotify’s were 49x, 38x, and 12.8%.

The Motley Fool - Netflix reported about $12.9 billion in quarterly revenue and earnings per share of 87 cents, compared with analyst expectations of 82 cents. Full-year revenue guidance was $51.1 billion, up 13% year over year and below the $51.2 billion analyst expectation.

The Motley Fool - The article reported Netflix shares at $63.90, down $1.95 (2.96%), with a $270.40 billion market capitalization, a 52-week range of $62.86–$116.73, and a forward P/E of 17 versus 19 for the average S&P 500 stock.

WHY:

24/7 Wall St. - The article attributed the share decline partly to reduced advertising and free-cash-flow outlooks and concerns about view-hour growth; it said a one-time fourth-quarter real-estate transaction drove the free-cash-flow reduction.

The Motley Fool - It said the earnings results did not resolve investor concerns about slowing growth; revenue guidance was at the lower end of Netflix’s prior range.

HOW:

24/7 Wall St. - The article said the fourth-quarter margin guidance included about 120 basis points from job cuts, which were expected to reduce costs over time.

24/7 Wall St. - Its price projections were $68.80 for December 2026, $78.99 for October 2027, $87.70 for October 2028, $97.58 for October 2029, and $101.57 for October 2030.

The Motley Fool - It reported Netflix trading at around levels not seen in over two years and said its shares had lost more than 40% of their value over the preceding 12 months.

(UPDATED October 27, 2026 07:19 UTC)

Netflix beat earnings expectations, reporting third-quarter earnings of 87 cents a share and revenue of about $12.9 billion, while its operating margin rose to 34.6%. Shares fell after the company cut its 2026 advertising and free-cash-flow outlooks, and executives acknowledged that U.S. execution and growth in viewing hours need improvement. Netflix said its advertising business is growing more than 80% and churn was better than forecast, but its full-year revenue guidance came in below analysts’ expectations.