Netflix‘s 2025 earnings and operating report is in, and so are the latest management comments on its megadeal for Warner Bros., which the streamer amended to make it all-cash just ahead of the financial update. The question going into the latest set of results was whether the earnings report and executive commentary could refocus investor attention away from the big transaction, which has been a drag on the stock, onto fundamentals, and if it could do so in a positive way.
The streaming giant’s fourth-quarter updates included news that it ended 2025 with more than 325 million global paid subscribers, up from 302 million as of the end of 2024. But the company’s financial outlook, especially for profit margins, disappointed.
In content-focused highlights, Netflix also disclosed on Tuesday that KPop Demon Hunters is its most-watched movie or show by a long shot. And in his comments, co-CEO Ted Sarandos focused on the narrative of new competitive threats for Netflix, citing the likes of YouTube and telling investors and regulators, set to review its $83 billion deal for Warner Bros., that “Instagram is coming next.”
In early Wednesday trading, Netflix shares hit a new 52-week low of $81.93, below the previous $82.12 low set in April, before more recently trading down 5.1 percent at $82.84.
Here’s what Wall Street analysts make of Netflix’s latest results, The Hollywood Reporter‘s snapshot of reactions is below:
Analyst: Jeff Wlodarczak, Pivotal Research Group
Stock rating and price target: hold, $95, down $10
Key takeaways: “Netflix disclosed that it had reached a subscriber level (325 million) in the fourth quarter that was about 10 million lower than our forecast,” the former Netflix bull, who recently turned more bearish, wrote, concluding that the company’s latest results were “driven more by price increases than subscriber growth.” The consequence: “Post-results we tweaked our subscriber forecasts materially lower, offset partially by higher forecast average revenue per user (ARPU),” which pushed his stock price target down from $105.
Engagement has been a key focus for Wall Street in a competitive landscape, and Wlodarczak also has some worries on that front. “While engagement rose slightly, we are increasingly concerned that especially GenZ is less interested in long-form content as their time migrates to free social media platforms, which we believe will show up in slower subscriber and ARPU growth. This is exacerbated by the increasing popularity of FAST platforms, as inflation has put pressure on low-income households in particular.”
In December, the Pivotal analyst had downgraded Netflix shares, arguing that the Warner Bros. deal felt like an admission of the competitive power of the likes of YouTube and TikTok. So what’s his latest take on the mega-merger? “We do not account for the WBD deal as we expect the price to move higher but we would expect the deal to lead to higher subscriber/ARPU forecasts, partly by eliminating a major potential competitor for Netflix [in] Paramount, and we expect the deal will be approved by regulators but it will require Netflix to sell the HBO distribution assets (Comcast being the most likely candidate to sell to) with a medium-term content rights deal attached to the asset,” Wlodarczak suggested. “This will be offset materially by the very expensive price Netflix will be paying for these assets, and net-net we would not expect a material difference in our target price post the close of this deal.”
Analyst: Laurent Yoon, Bernstein
Stock rating and price target: outperform, $115, down $10
Key takeaways: “Solid 2025 overshadowed by disappointing 2026 margin guide,” the expert summarized in the headline of his report, which fit well into the broader Wall Street chorus.
He broke down the issue in more detail. “Management is guiding to a solid 12-14 percent revenue growth, implying a … price increase, further supported by healthy subscriber growth and a doubling of advertising revenue to $3 billion in 2026,” Yoon explained. “Depending on the timing and magnitude of the price hike and advertising ramp, we believe 14 percent-plus revenue growth remains achievable in 2026. And given Netflix’s track record of exceeding top-line guidance in recent years, we remain constructive its revenue trajectory.” That said, its guidance for a 31.5 percent margin in 2026 only implies a change from 30.5 percent despite the big revenue jump, he highlighted.
“What [stock] multiple do you assign a company growing [revenue] at low double-digits with flat margins and about to be levered up” in the Warner Bros. deal, Yoon summarized the challenge for Wall Street, predicting the firm’s margin projections would increase over time. His takeaway was to lower his earnings forecasts, “driven mostly by higher content costs per management’s guidance,” and price target, while sticking to his stock rating. “Near-term sentiment and volatility are likely to persist, driven by softer-than-expected margin guidance and the WBD deal overhang,” he concluded. “That said, this setup also creates meaningful upside as the pursuit of WBD becomes more certain and margin guidance is revised upward into the second half.”
Analyst: Brian Pitz, BMO Capital Markets
Stock rating and price target: outperform, $135, down $8
Key takeaways: “Trying to Be Superman, But Not Immune to Kryptonite” was the headline of the expert’s Wednesday report. “Netflix delivered solid fourth-quarter results,” he explained. “The initial 2026 [financial guidance] was mixed,” especially for operating margins, but in a positive, “importantly, Netflix expects its advertising business to roughly double in 2026 to $3 billion as ad revenue scales to 6 percent of Netflix’s 2026 revenue.”
While all this led Pitz to reduce his stock price target, he reiterated his “outperform” rating, concluding that the company “remains the best-positioned player in streaming to gain share of linear TV budgets that continue to shift online.”
But the BMO expert expects deal noise to get more attention than operating trends for at least a while, warning: “[The] WBD acquisition remains [the] near-term focus.”
Analyst: Ralph Schackart, William Blair
Stock rating and price target: outperform, no price target
Key takeaways: “Solid quarter but guidance a bit light,” his highlights from the results echoed those of some peers. “Shifting focus to 2026 initiatives and close of Warner Bros. acquisition.”
Schackart summarized his read on the company’s engagement trends this way: “In the second half of 2025, view hours increased 2 percent (up from 1 percent growth in the first half), driven by a 9 percent increase in branded original content viewing hours from titles like the final season of Stranger Things and The Reckoning, Sean Combs’ documentary. However, overall engagement trends were impacted by a year-over-year decline in non-branded content viewing hours as a result of the WGA strike elevating licensing costs of second-run content in most regions from 2023 through 2024.”
In terms of the financial outlook, the expert noted that first-quarter revenue and margin guidance came in below Wall Street expectations. “Shares were down about 4.5 percent in the after market, likely due to the light guidance versus the Street,” the analyst concluded. “While the company provided a bit more detail on its strategy of the Warner Bros. acquisition in the shareholder letter and on the call, we believe the stock will likely remain range-bound until the outcome of the deal is finalized. Even though the overall fundamentals of the business remain solid, that will likely take a back seat to the battle to acquire Warner Bros., in our view. However, we believe the stock is set up to outperform after the outcome of the Warner Bros. potential acquisition.”
Analyst: John Blackledge, TD Cowen
Stock rating and price target: buy, $112, down $3
Key takeaways: Blackledge also emphasized that revenue and operating income guidance fell below analysts’ projections. However, “operating income growth is set to improve in the second half of 2026, per management, as content amortization growth decelerates,” he noted.
He also lauded positive engagement outlook commentary as the streamer expects to “benefit from a strong content slate, including returning hits Bridgerton (season 4) and The Night Agent (season 3),” the TD Cowen analyst wrote.
Of course, he also had takeaways on the Warner Bros. deal. “Netflix management is confident they can secure regulatory approval, citing TV competition from YouTube, Amazon, Apple, and Instagram,” the analyst said. “Management highlighted Warner Bros’ ‘complementary’ theatrical business, TV studio, and HBO Max, while noting potential for more flexible sub options as a combined business.”
Analyst: Alicia Reese, Wedbush
Stock rating and price target: outperfrom, $115
Key takeaways: “Long-term outweighs near-term drag,” Reese summarized here sentiment in the headline of her Wednesday report. “Shares are again under pressure after a second underwhelming quarter, as investors have become accustomed to phenomenal results,” she explained. “Still, we think Netflix is positioning for substantial growth in global advertising, and that should not be overlooked.”
Patience will be the key, she advised investors. “Ad revenue should at least double to $3 billion in 2026, with significant opportunities remaining in 2027 and beyond, particularly if Netflix can close the WB deal next year,” she wrote. “That said, we expect volatility in shares until the April shareholder vote and Netflix’s first-quarter earnings results. A lengthy regulatory process notwithstanding, we expect less overhang after the shareholder vote. Plus, Netflix’s results should improve throughout the year, and shares should see a notable lift, particularly in the back half of the year when advertising revenue and price increases outpace increased content spend.”
Reese also weighed in on the debate about competitive risks for the streaming giant, sharing: “As Netflix continues to hone its content strategy, adding more global content, live events, podcasts, and evolving its release strategy to maximize buzz, we expect viewership to continue to rise over the next two years.”
Analyst: Michael Morris, Guggenheim
Stock rating and price target: buy, $130, down $15
Key takeaways: Morris was among the Wall Street experts cutting their stock price target on the streamer on Wednesday amid reduced earnings estimates, with the target in his case from $145 to $130. “Netflix delivered top-and-bottom line beats slightly ahead of Street fourth-quarter forecasts, though engagement trend and 2026 profit guidance temper enthusiasm,” he explained.
He also touched on the company’s bi-annual engagement report. It “exhibited a second-half 2025 viewership increase of 2.2 percent (versus 1.3 percent in the first half 2025), which we expect will continue to fuel questions around the importance of the WBD acquisition and the risk to long-term growth expectations should the company’s bid be unsuccessful,” Morris shared.
So what’s ahead for Netflix? More deal clouds overhanging the stock, according to the expert. Wrote Morris: “We expect the path to conclusion on the WBD bid will remain a primary sentiment driver and likely share appreciation limiter over the next three months.”
Analyst: Robert Fishman, MoffettNathanson
Stock rating and price target: buy, $115, down $25
Key takeaways: Stranger Things is finished, but the analyst diagnosed the comeback of a familiar Netflix stock issue, highlighting in the headline of his report: “The Old Bull & Bear Debate Returns.” “The growing bear case for Netflix, even ahead of the initial WBD bidding war, revolved around whether slowing engagement would lead to a faster deceleration in revenue growth,” he wrote. “With last year’s pullback in subscriber disclosure and a continued lack of advertising revenue detail, investors were left debating whether the engagement monetization story would be enough to sustain double-digit total company revenue growth and … margin expansion in the out years.” The surprise Warner Bros. only deepened the debate. Does it mean that Netflix’s core growth is “slowing even faster and a deal of this size is a necessary means to solve its long-term engagement problem and/or reinvigorate profits,” the expert explained.
The earnings update didn’t provide a clear answer, leaving investors to pick what they wanted to focus on, Fishman suggested. On a positive note, advertising revenue is expected to keep growing strongly, and more price increases are expected. On the downside, margins aren’t growing much, and engagement trends are mixed.
“Despite returning to the familiar old debate over subscriber versus pricing growth plus how quickly advertising can reach at least 10 percent of total revenues (we now think by 2029), we are left to acknowledge Netflix’s stock price should have a harder time rebounding as long as the ongoing WBD potential bidding war continues,” Fishman concluded, cutting his forecasts and stock price target, but remaining positive on the stock’s long-term outlook: “After the recent pullback, we think Netflix stock price reflects an attractive entry point for investors willing to focus on the growth in the core businesses as well as trust that the company will remain disciplined in its pursuit of Warner Bros.”
Analyst: Peter Supino, Wolfe Research
Stock rating and price target: outperform, $95, down $26
Key takeaways: “Expense guidance fueled concerns inflamed by the Warner bid,” he highlighted in his summary of takeaways from the company’s latest earnings report and guidance. “The cost of growth was already of deep concern to investors.”
But Supino does like the investment. “Netflix’s decisions to press its scale advantages by acquiring Warner and accelerating content & ad tech spending should reinforce Netflix’s long-term growth and category leadership,” he wrote. “With a less than 10 percent share of global TV viewing and less than 15 percent TV revenue share in the U.S., Netflix can sustain double digit percentage growth for another decade.”
That said, he urged shareholders not to hope for overnight gains. “The overhang of the Warner merger implies that investors should prepare to be patient,” the analyst emphasized. “Management has put a lot on investors recently – quoting a VIP from Squid Game (quoting an 8th century Chinese poet): ‘Good rain knows the best time to fall’.”
