With its stock already down 44% from last June's peak, shareholders clearly weren't optimistic heading into Thursday evening's release of its second-quarter numbers. Yet somehow, streaming giant Netflix (NASDAQ: NFLX) still managed to disappoint investors. Shares fell more than 8% in Thursday's after-hours trading, in fact, not so much in response to its second-quarter results, but in response to the company's Q3 2026 guidance. Further stoking the selling was the word that, going forward, Netflix will report its total viewing hours only once per year. The bears took that ball and ran with it, so to speak, deterring any would-be buyers waiting for a sign that it's time to dive in.
This post-earnings stumble may well be the last of the sell-off, though. Indeed, if you can stomach the risk and the inevitable volatility, the stock is finally a buy.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Netflix turned $12.56 billion worth of revenue into a per-share profit of $0.80 for the three months ending in June. That's up 13.4% and 11.1%, respectively, and essentially in line with analysts' expectations.
However, the quarter currently underway isn't apt to be quite as healthy as initially expected. The company's calling for a top line of $12.86 billion to turn into per-share earnings of $0.82. That's better than the year-earlier comparisons of $11.51 billion and $0.59. But, those projections are also shy of analyst estimates of $13 billion and $0.84 per share. Following the company's recent (and questionable) decision to reinstate free trials after a six-year hiatus, investors were quick to conclude that the streaming giant is really struggling.
And in some regards, it is struggling. For instance, growth is clearly slowing down, forcing investors to price in a factor they've never needed to before.
What's not being priced in, however, is how the entire dynamic surrounding Netflix — and for that matter, the entire streaming industry — has changed. This company remains the name to beat in this business, as well as the business's best bet for investors even if it's not evident in the most closely watched numbers.
The changes have been so slow that they've almost been forgotten. This includes the saturation of the once-uncontested market, the mainstreaming of advertisements before and even during programming, and the addition of select live events side-by-side with a library of on-demand content. These evolutions apply to most of the major names in the business, including Netflix, which expects its still-nascent advertising business to generate on the order of $3 billion in revenue this year.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
