Netflix Stock Drops 10% as Analysts React to First-Quarter Earnings and Unchanged 2026 Guidance
Netflix’s first-quarter earnings update, released late Thursday, revealed a mixed bag of results that exceeded many expectations but ultimately disappointed investors. The global streaming leader maintained its guidance for 2026, yet many stakeholders were left wanting more. Following the announcement, Netflix shares fell 9% in after-market trading and were down 10.8% to $96.20 by Friday morning.
Price Hikes and Market Reactions
The decline in stock price can be attributed to recent price hikes in the U.S. and a renewed sense of caution among investors. Netflix’s exit from the bidding war for Warner Bros. Discovery, coupled with a $2.8 billion break-up fee, had initially buoyed investor sentiment. However, the company’s decision to maintain its 2026 guidance rather than raise it led to a reassessment of its stock value.
Analysts have begun to weigh in on the implications of these earnings and the company’s outlook. The upcoming exit of Netflix founder and chair Reed Hastings, along with insights from co-CEOs Ted Sarandos and Greg Peters, has added another layer of complexity to the situation.
Analyst Insights
Michael Morris from Guggenheim Securities rated Netflix as a “buy,” with a price target of $120, down from $130. He noted that while Netflix’s first-quarter results surpassed expectations, the stock faced pressure because investors anticipated more than just a reiteration of guidance. Morris highlighted that the second-quarter revenue guidance indicates a deceleration to 12% foreign exchange-neutral year-over-year growth, down from 14% in the first quarter. He characterized the management’s decision to maintain guidance as a cautious approach.
Jeffrey Wlodarczak of Pivotal Research Group maintained a “hold” rating with a price target of $96, up from $95. He expressed concerns about competition for consumer attention, particularly from short-form content platforms like TikTok and Instagram. Wlodarczak also noted that Netflix’s engagement metrics remained stable, but the rise of free ad-supported TV channels could pose challenges.
Alicia Reese from Wedbush Securities maintained an “outperform” rating with a price target of $118. She remains optimistic about Netflix’s potential for revenue growth through advertising and increased subscription pricing, although she acknowledged challenges in Europe regarding price increases.
Ralph Schackart from William Blair noted that Netflix’s stock was impacted by high expectations leading into the earnings report. He believes that once investors digest the positive growth metrics, the stock price could rebound. Schackart emphasized that Netflix remains well-positioned as a leader in streaming.
Long-Term Outlook
Robert Fishman from MoffettNathanson rated Netflix as a “buy” with a price target of $120. He pointed out that while the company’s full-year revenue guidance remained unchanged, its margin forecast for 2026 also stayed the same despite the Warner Bros. deal fallout. Fishman encouraged investors to focus on the long-term potential of Netflix, suggesting that short-term expectations will eventually recalibrate.
John Blackledge from TD Cowen maintained a “buy” rating with a price target of $112. He highlighted that Netflix’s first-quarter results exceeded Wall Street expectations, although the second-quarter outlook fell short. Blackledge noted that management reported a 2% year-over-year increase in engagement, driven by popular content.
Mark Mahaney from Evercore ISI also maintained an “outperform” rating with a price target of $115. He emphasized that Netflix remains a high-quality asset and a global leader in video streaming, despite the recent stock decline. Mahaney pointed out that Netflix’s advertising revenue is on track to double to $3 billion by 2026.
Brian Pitz from BMO Equity Research rated Netflix as “outperform” with a price target of $135. He expressed confidence in Netflix’s trajectory, particularly in the realms of gaming and podcasting, which he believes can enhance long-term engagement.
As reported by www.hollywoodreporter.com.
Explore the latest digital editions of FAME Delivered in the Magazine section.
Published on 2026-04-17 15:49:00 • By FAME Delivered News Desk