Published by @dailyanalysts · July 21, 2026 · Price verified $67.44 (−0.24% intraday, ~14:03 ET); prev close $67.60. All figures post the 10-for-1 split effective Nov 17, 2025.
Primary source: Netflix Q2 2026 shareholder letter and earnings call.
| Metric | Result | Consequence |
|---|---|---|
| Revenue | $12.56B, +13% YoY (vs $12.59B est) | Slight miss; growth decelerating from ~16% earlier in the cycle |
| EPS | $0.80 vs $0.79 est | Penny beat — the print was fine, the guide was the problem |
| Net income | $3.40B vs $3.13B YoY (+9%) | Profitability still compounding |
| Q3 2026 guide | Revenue growth to slow to +12% | Second-derivative deceleration — the core bear point |
| FY26 revenue | Narrowed to $51.0–51.4B (from $50.7–51.7B) | Narrowed, not raised; bulls wanted a raise |
| Operating margin target | Held at 31.5% | Not lifted — margin upside disappointment |
| Ad revenue | Still guided to ~double YoY to ~$3B in 2026 | The growth engine, but off a small base; Upfront commitments closing in coming weeks |
| Engagement | View hours +2% H1'26; hours-per-member falling | Cutting "What We Watched" to annual from 2027 — a self-inflicted transparency wound |
| Capital return | Largest buyback to date; M&A firepower retained | Buyback "not large enough to preclude large-scale M&A" (Citi) — option value now a fear, not a catalyst |
TTM PE ~21x, forward ~18–20x (Morgan Stanley ~18x). Market cap ~$283.7B. ROE 48%, gross margin 49%, revenue growth 16% YoY, beta 1.53. Wells Fargo frames a "new normal" 15–20x range — which is essentially where the stock sits today. The de-rating has largely already occurred.
Near-universal price-target cuts after Q2, ratings mostly held. MarketBeat consensus (54 analysts): ~$104 average PT (Moderate Buy), down from ~$130 a year ago; range $70–$151.
| Firm | Rating | Target (new / old) |
|---|---|---|
| Guggenheim | Buy | $75 (from $120) |
| JPMorgan | Overweight | $85 (from $118) |
| Wolfe | Outperform | $84 (from $107) |
| Wells Fargo | Equal Weight | $80 (from $105) |
| Barclays | Equal Weight | $80 (from $85) |
| Bernstein | Outperform | $95 (from $100) |
| Evercore ISI | Outperform | $100 (from $115) |
| BofA | Buy | $105 (from $125) |
| Wedbush | Outperform | $105 (from $118) |
| Pivotal | downgraded to Hold | $70 (from $96) |
| Citi | downgraded to Neutral | ~$100 |
Bernstein said it plainly: "no obvious positive catalyst on the horizon."
The bears won the quarter and were right on the near term: decelerating growth, no margin upside, less transparency, and an M&A overhang mean there is no reason to rush. The stock can chop/drift into the Q3 print (Oct 2026) — there is no catalyst until then.
But the risk/reward at $67 is fundamentally different than at $127. You are paying ~19x forward for a business with 48% ROE, ~13% revenue growth, expanding margins, FCF-funded buybacks, and an ad line doubling to ~$3B. That is cheap for the quality. Downside is mostly priced; the missing piece is a catalyst, not value.
I do not endorse the "+55% to $104" consensus dream — those targets still assume a re-acceleration I don't see. My honest base case is a mature low-teens grower worth ~24–27x: mid-$80s to low-$90s over 6–12 months, driven by buyback-fueled EPS and ad-ramp confirmation, not a growth re-rate.
The genuine bear case is not slowing growth — it is M&A. Management deliberately kept the buyback small enough to preserve firepower after walking away from the Warner Bros. Discovery bid. A large transformative deal would compress the multiple toward 15x (~$52–55) and break the capital-return thesis. If a big deal is announced, cut it.