Netflix shares fell 10% following a disappointing earnings forecast, which included a weaker revenue outlook and reduced viewership reporting, raising concerns among investors.
Netflix shares experienced a significant decline of 10% after the company released an earnings forecast that indicated another quarter of slower revenue growth and a reduction in viewership reporting. According to a report by Reuters, the stock approached a two-year low during early trading, with the drop potentially erasing $35 billion from Netflix’s market value, which was approximately $313 billion at the time.
In its latest disclosure, Netflix announced a reduction in the frequency of its viewing-hours report, changing it from twice a year to once a year starting in 2027. This decision follows last year’s elimination of subscriber count reporting, leaving investors with less transparency amid increasing competition from platforms like YouTube and traditional media outlets.
“Whenever you take away a data point from investors when results aren’t as good as they have been, you will get punished by the market,” said Ben Barringer, head of technology research at Quilter Cheviot.
Adding to the uncertainty, Netflix’s unsuccessful attempt to acquire Warner Bros. earlier this year has raised questions about its future growth trajectory, especially in light of the slow adoption of its ad-supported streaming tier, which was previously touted as a significant growth driver.
Since reaching an all-time high in June 2025, Netflix’s stock has plummeted by 44%, including a drop of over 20% just this year. Analysts have noted that the streaming service’s content lineup has been weaker in 2026 compared to the previous year, which featured the final season of the popular sci-fi series “Stranger Things” and the acclaimed South Korean drama “Squid Game.”
“Pulling back engagement reporting at the exact moment engagement is in the spotlight gives off a strong ‘nothing to see here’ vibe,” remarked Mike Proulx, Director at Forrester Research.
Despite the recent downturn, Netflix trades at nearly 20 times its expected earnings over the next 12 months, a premium compared to Walt Disney’s 13.5 times and Comcast’s 6.6 times. Following the disappointing forecast, at least 18 analysts revised their price targets for Netflix downward, although the median target remains about 40% above the stock’s closing price on Thursday.
Earlier this month, Netflix raised subscription prices across all its streaming plans. The company indicated that the results of these price hikes were consistent with previous changes and expectations.
According to CNBC, Netflix reported a net income of $3.40 billion, or 80 cents per share, for the second quarter, compared to $3.13 billion, or 72 cents per share, during the same period last year. Looking ahead, Netflix anticipates third-quarter revenue growth of 12% and stated that its outlook for 2026 remains consistent with earlier forecasts. The company has also narrowed its revenue forecast range for 2026 to between $51 billion and $51.4 billion, down from an earlier estimate of $50.7 billion to $51.7 billion.
The recent developments have left investors anxious about Netflix’s ability to navigate a competitive landscape and maintain its growth trajectory.
According to Reuters.