Netflix’s latest earnings report has left Wall Street divided, with Q2 revenue slightly missing expectations and a narrowed full-year forecast raising concerns about slowing growth. Despite a slight beat on EPS and 13% year-over-year revenue growth driven by membership and ad revenue, analysts are slashing price targets, pushing shares down significantly as the streaming giant grapples with future growth strategies and subscriber retention.
Wall Street's confidence in Netflix is wavering after the streaming giant's latest earnings report on Thursday failed to alleviate concerns about decelerating growth. A number of analysts swiftly moved to slash price targets for the stock following the announcement.
For the second quarter, Netflix reported revenue of $12.56 billion, slightly under the $12.59 billion analysts polled by LSEG had anticipated. Despite this slight miss, revenue still climbed 13% year-over-year, largely attributed to growth in memberships, advertising, and recent subscription price hikes. Earnings per share (EPS) came in at 80 cents, a penny above the Street's consensus estimate of 79 cents.
However, the company's outlook painted a more cautious picture, narrowing its full fiscal year revenue forecast to a range of $51 billion to $51.4 billion. Furthermore, Netflix anticipates a slowdown in third-quarter revenue growth to an increase of 12%. These projections sent Netflix shares tumbling nearly 11% on Friday, compounding a year-to-date decline that now stands at 30%.
Investors have been locked in a debate regarding Netflix's avenues for new growth and its strategy for retaining subscribers, especially after abandoning its pursuit of Warner Bros. Discovery and implementing subscription cost increases. Analysts agree that the latest quarter did little to resolve this ongoing discussion.
While results were generally mixed and largely aligned with estimates, Netflix reported a modest 2% growth in viewing hours during the first half of the year. The company also indicated plans to boost content spending by 10% in 2026.
Peter Supino, an analyst at Wolfe Research, encapsulated the sentiment by describing Netflix's second quarter as a "murky mosaic." He believes this mixed bag could hinder the stock from achieving previously expected gains. "The quarter was a win for the bears, while the price of NFLX discounts multi-year deceleration," Supino noted to clients, reiterating an outperform rating but lowering his price target to $84 from $107, still suggesting a 13% upside from Thursday's close.
Here’s a deeper dive into what other major Wall Street firms are saying about Netflix:
- Bank of America: Analyst Jessica Reif Ehrlich maintains a "Buy" rating but lowered her price target from $125 to $105, implying a 41% upside from Thursday's close. She stated, "Heading into 2Q earnings, Netflix was a battleground stock, pressured by concerns related to slowing engagement, decelerating revenue growth, and the possibility of transformative M&A. While results were largely in line, they were not strong enough to fundamentally alter the debate."
- JPMorgan: Doug Anmuth reiterated an "Overweight" rating, adjusting his price target from $118 to $85, indicating roughly 14% upside. Anmuth highlighted Netflix's stance that "not all viewing hours are created equal as it optimizes across quality, variety, & quantity, and that it is not a linear relationship between view hours and revenue/profit…While we understand the concerns, we believe revenue & profit growth are ultimately most important, & NFLX is not managing for engagement hours."
- Citi: Jason Bazinet holds a "Buy" rating with a $100 price target, suggesting a 34% premium over Thursday’s close. Bazinet anticipates investors will appreciate the "low-single-digits growth in engagement and by the quarterly buyback (the largest to date)." However, he predicts shares will trade lower due to: "1) lower UCAN revenue in 2Q26; 2) a lower-than-expected 3Q26 outlook; 3) the company did not raise full-year guidance as some bulls were expecting; 4) reduced frequency of engagement disclosures; and 5) the buyback is not large enough to preclude large-scale [mergers and acquisitions]."
- Wells Fargo: Steven Cahall downgraded Netflix to an "Equal Weight" rating, lowering the price target from $105 to $80, which is nearly 8% above Thursday’s close. Cahall remarked, "NFLX feels like a maturing story. Margin expansion is stable, but likely can't [accelerate without] risking further growth. This outlook fades the [price-to-earnings ratio with] a new normal range of 15-20x. To re-expand the multiple, content will need to drive better engagement."
- Bernstein: Laurent Yoon maintained an "Outperform" rating, reducing his price target from $100 to $95, suggesting an approximate 28% upside. Yoon noted, "While the reaction reflects near-term investor disappointment, we do not believe the current valuation adequately captures Netflix's mid/long-term potential. … That said, Netflix faces no shortage of near-term questions, with no obvious positive catalyst on the horizon."
- Morgan Stanley: Sean Diffley kept an "Overweight" rating, adjusting his price target from $90 to $83, nearly 12% above Thursday's close. Diffley argued, "Engagement fears appear overblown ([viewing hours] grew +2% [year over year] in [the first half of this year]) and while [revenue] growth is decelerating slightly. … We still see sustainable double-digit topline growth and expanding margins, trading at ~18x [price-to-earnings]. ... While this print is unlikely to settle the major debates around: 1) engagement/pricing power, 2) questions on return on investment/margins and 3) [mergers and acquisitions], the data points received were in aggregate less bad than feared."
- Goldman Sachs: Eric Sheridan reiterated a "Buy" rating with a $94 price target, representing a 26% upside from Thursday's closing price. Sheridan stated, "On the debates around engagement metrics and allocating toward inorganic growth, the company likely did not extinguish what have been very volatile investor debates in the past few months and perception/reality on both issues will likely be a driver of short-term stock volatility intra-quarter. Looking over the long-term (while acknowledging where the stock sits and the debates reside), we remain constructive on NFLX on the back of our work that is supportive of user/member growth, pricing power (to address value delivered to members), a rising ad supported revenue stream, a balance of content investments, capital returns and a high bar for [mergers and acquisitions]."
- Barclays: Kannan Venkateshwar maintained an "Equal Weight" rating, lowering his price target from $85 to $80, approximately 8% above Thursday’s close. Venkateshwar commented, "Visibility into next year's growth drivers remains limited, with weaker second derivatives likely to dominate the narrative over the coming quarters. Netflix results and guide were roughly in line with prior guide and expectations, but given recent engagement concerns, risk/reward in the name is asymmetric."
