Netflix stock dropped about 4% on Wednesday after the company released Q4 earnings.
Investors seemed most concerned about the outlook for 2026.
Is this short-term noise, or are there longer-term concerns about Netflix stock?
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Netflix (NASDAQ: NFLX) stock was down as much as 7% in pre-market trading and off roughly 4% on Wednesday to around $83.40 per share — a 52-week low. The catalyst is the streamer’s fourth-quarter earnings report, which many investors found disappointing.
The Q4 results themselves were solid and beat analysts’ estimates. Netflix posted revenue of $12.05 billion — up about 18% year over year. It topped estimates of $11.97 billion. Net income climbed 29% year over year to $2.4 billion, or $0.56 per share. This topped estimates of $0.55 per share.
This concern was the outlook for 2026, which calls for revenue of $50.7 billion to $51.7 billion, or annual growth of 12% to 14%. That would be below the 16% revenue growth rate in 2025.
There were also some concerns about subscriber growth. While subscribers grew 8% in 2025 to 325 million, the rate was below each of the past two years. With an expected doubling of ad revenue in 2026, many investors likely translated that to lower growth in memberships, given the lukewarm revenue projections.
Another factor hanging over investors is the pending deal to buy Warner Bros. assets from Warner Bros. Discovery (NASDAQ: WBD). Netflix recently upped its offer to an all-cash deal for $27.75 per share. The total value, including taking on some Warner Bros. debt, is about $82.7 billion.
Many investors are concerned about this potential acquisition. Since it was first announced in early December, Netflix stock has dropped about 23%. There are worries that Netflix is overpaying for Warner Bros., with the offer driven up by a hostile takeover bid by Paramount Skydance.
In addition, many investors see potential risks with integration — that is, successfully integrating properties like HBO Max and Warner Bros. film studios and theatrical releases into the Netflix ecosystem. There are also risks of Netflix losing focus on the successful business it’s created to focus on integrating this entertainment behemoth.
Then there is the uncertainty around whether or not it will even get approved by Warner Bros. Discovery shareholders in April, given the Paramount offer. Further, there are regulatory hurdles and potential antitrust challenges.
So, whether you like the deal for Netflix or don’t, there are many uncertainties.
