Netflix Authorizes Fresh $25B Buyback As Media M&A Heats Up — NFLX Stock Gains Pre-Market

• Netflix’s fresh $25 billion share buyback program comes after the company’s second-quarter earnings forecast missed Wall Street expectations.
• Netflix’s 2026 revenue forecast at a midpoint of $51.2 billion also missed the $51.4 billion consensus estimate.
• The company also announced that its co-founder, Reed Hastings, will step down in June this year, after 29 years at the streaming giant.

Netflix Inc. (NFLX) board on Thursday approved an additional $25 billion share repurchase, without an expiry date for the buyback program.

Netflix stated that the newly authorized $25 billion share repurchase program is in addition to the buyback plan approved in December 2024.

This comes ahead of a key shareholder vote on the acquisition of Warner Bros. Discovery Inc.’s (WBD) by Paramount Skydance Corp. (PSKY) in a $110 billion deal.

Netflix shares rose more than 1% in Thursday’s pre-market trade. Retail sentiment on Stocktwits around the company trended in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels.

Buyback After Disappointing Forecast

Netflix’s fresh $25 billion share buyback program comes after the company’s second-quarter (Q2) earnings forecast missed Wall Street expectations.

Netflix guided for earnings per share (EPS) of $0.78 on revenue of $12.57 billion in Q2, while Wall Street analysts estimated an EPS of $0.79 on revenue of $12.58 billion, according to Fiscal.ai data.

Netflix’s full year 2026 forecast also came in lower than expected. The company expects revenue in the range of $50.7 billion and $51.7 billion. At a midpoint of $51.2 billion, it fell short of a consensus estimate of $51.4 billion.

The company also announced that its co-founder, Reed Hastings, will step down in June this year, after 29 years at the streaming giant.

The tepid forecast also weighed on the Netflix stock, which is down more than 4% since the earnings were announced last week.

Chasing WBD Deal Hurt Netflix, Says Media Veteran

Media veteran Tom Rogers said that Netflix's pursuit of Warner Bros. Discovery to boost its library of traditional media may have hurt the company’s stock.

Rogers also expressed concerns that the $70 billion deal to acquire Warner Bros. Discovery and its content library would have taken Netflix’s focus away from the AI challenge in the medium term.

“I think it clearly hurt the stock, and it clearly raised the issue in a lot of investors’ minds, ‘Do they need to do this?’. I don’t think they needed to do it, I think they’re going to win far and away the long-term entertainment streaming game with or without that acquisition,” Rogers added.

He also noted that the next challenge for Netflix is AI-generated content, and that its key competitor in this segment is YouTube, not traditional media.

“We’re seeing YouTube’s viewership growing by leaps and bounds. YouTube today has 50% greater viewership than Netflix does on TV,” he added.

Some Wall Street analysts expressed concerns following Netflix’s earnings print. Barclays trimmed its NFLX price target to $110 from $115, noting that the market’s post-earnings reaction points to potential risks to expectations that could persist beyond the short term.

Analysts at Wolfe Research noted that the Q2 forecast miss points to slowing sales and margin momentum for Netflix, lowering their price target to $107 from $110 while keeping an ‘Outperform’ rating.

NFLX stock is down 1% year-to-date and 10% over the past 12 months. The S&P 500 ETF (SPY) is up 35% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 47%.

WBD stock is down 5% YTD, while PSKY stock is down 12%.

Also See: GME Stock On Track For Best Intraday Gains In 10 Weeks — Why Are Retail Traders Excited?

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