NFLX Stock Headed For Worst Single-Day Fall In 9 Months On Weak Q3 Guidance — Analyst Warns Netflix Is 'Losing Narrative Control'

• Barclays lowered its price target on Netflix to $80 from $85 while maintaining an ‘Equal Weight’ rating.
• The firm said visibility into Netflix's growth drivers for next year remains limited, with weaker growth trends likely to shape the investment narrative in the coming quarters.
• Pivotal Research took a more cautious stance, cutting its price target to $70 from $96 while reiterating a ‘Hold’ rating.

Shares of Netflix Inc. (NFLX) were headed for the worst single-day fall in about nine months on Friday after the company’s weak third-quarter (Q3) guidance disappointed investors.

Netflix forecast revenue of $12.86 billion in Q3, with earnings per share (EPS) at $0.82, while Wall Street expected revenue of $13 billion on EPS of $0.84, according to Fiscal.ai data.

Netflix shares were down nearly 10% in Friday’s pre-market trade. NFLX was among the top trending tickers on Stocktwits at the time of writing.

Wall Street Warns NFLX Is ‘Losing Narrative Control’

According to TheFly, Wall Street analysts highlighted that while Netflix’s second-quarter (Q2) performance was in line with expectations, they argued that the focus has now shifted to a softer-than-expected outlook and management's decision to reduce engagement disclosures.

Barclays lowered its price target on Netflix to $80 from $85 while maintaining an ‘Equal Weight’ rating. The firm said visibility into Netflix's growth drivers for next year remains limited, with weaker growth trends likely to shape the investment narrative in the coming quarters.

While Barclays acknowledged that Netflix continues to generate healthy absolute growth, it said the company is "losing narrative control" as investors increasingly question the durability of that growth.

Pivotal Research took a more cautious stance, cutting its price target to $70 from $96 while reiterating a ‘Hold’ rating. The firm described Netflix's Q2 performance as "decent" but highlighted that the streaming giant’s Q3 guidance was a key concern.

The firm also criticized management's decision to reduce engagement disclosures from twice a year to once annually beginning in 2027, calling the move "not a great look." Following the results, Pivotal lowered its subscriber forecasts and raised its cost estimates, reflecting a more conservative outlook for the business.

TD Cowen also reduced its price target to $100 from $112, while maintaining a ‘Buy’ rating on the stock.

The firm added that management's decision to report engagement metrics annually rather than semiannually going forward became another source of investor concern and contributed to the sharp post-earnings sell-off.

NFLX CFO Downplays Deceleration Concerns

During a post-earnings call with analysts, Netflix CFO Spencer Neumann downplayed concerns around the company’s performance and deceleration.

Neumann added that Netflix continues to see healthy acquisition and retention trends in terms of memberships, while its recent price changes are working out well. He said that the revenue drivers in Q3 are very similar to those of Q2, which are primarily subscription revenue growth from increases in memberships, pricing, and higher advertising revenue.

Netflix reported EPS of $0.8 on revenue of $12.56 billion in Q2, compared to an estimated EPS of $0.79 on revenue of $12.58 billion.

What Retail Traders Think Of NFLX Stock

Retail sentiment on Stocktwits around Netflix trended in the ‘bullish’ territory, with message volumes at ‘high’ levels at the time of writing.

NFLX stock is down 21% year-to-date and 41% over the past 12 months. The S&P 500 ETF (SPY) is up 20% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 27%.

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