Hello, Thanks for signing up for MarketBeat Daily Ratings—we’re excited to have you on board. Every weekday, you’ll get a curated summary of new “Buy” and “Sell” ratings from Wall Street’s top-rated analysts, the latest stock news, and bonus investing content—all delivered straight to your inbox. You’re just two quick steps away from completing your sign-up: 1. Make sure our emails go to your inboxGmail users:
Mobile: Tap the three dots (…) in the top right and select Move to Inbox or Move to Primary
Desktop: Click the folder icon at the top and select Move to Inbox or Primary Apple Mail users:
Tap our email address at the top (next to From: on mobile), then select Add to VIP Other providers:
Reply to this message and add newsletters@analystratings.net to your contacts 2. Confirm your subscriptionClick this link to confirm your subscription. This verifies your account and ensures you receive your newsletters without interruption instead of getting stuck in your spam filter. Confirm your subscription here. After you confirm, feel free to download our popular free report, "7 Stocks to Buy and Hold Forever" with this link. Thanks again for subscribing—we look forward to being part of your investing journey. 
Matthew Paulson
Founder and CEO, MarketBeat. P.S. If you didn’t mean to subscribe, no problem—you can unsubscribe here.
Exclusive Content
Why Netflix Tanked Despite Big EPS Beat, Outlook AheadAuthored by Leo Miller. Publication Date: 4/17/2026. 
Key Points
- Netflix stock took a huge hit after its latest earnings report, even as EPS rose by over 80%
- A leftover from its failed WBD deal created a one-time earnings uplift
- Meanwhile, a key leader departed, and Netflix extended its live sports success internationally
- Special Report: Elon Musk’s $1 Quadrillion AI IPO
Entertainment giant Netflix (NASDAQ: NFLX) just released one of its more anticipated earnings reports in some time. The firm’s latest report is its first since losing the battle to Paramount Skydance (NASDAQ: PSKY) in the bid to acquire Warner Bros. Discovery (NASDAQ: WBD). The market reacted poorly to the results, but understanding why requires looking beyond the headline numbers. Considering Netflix’s long-term growth potential alongside its underwhelming near-term guidance, the stock’s risk-reward profile looks relatively balanced. Netflix’s Huge EPS Beat Doesn’t Tell the Full StoryIn its Q4 fiscal 2025 (FY2025), Netflix posted revenue of $12.25 billion, roughly 16% year-over-year (YOY) growth. (Note that Netflix’s fiscal year reporting period is about one quarter ahead of the calendar year.) That topped expectations of $12.17 billion.
For a moment…
Forget about Trump’s ties to Israel.
Forget about reports of Iran’s nuclear program.
Because my research has led me to believe we’re risking World War 3 with Iran for a completely different reason. Click here to find out what it is.
Netflix delivered an even larger beat on the bottom line. Diluted earnings per share rose to $1.23, an 86% YOY increase, versus expectations of $0.76. However, that figure was boosted by a key one-time item. After the WBD deal fell apart, Paramount paid Netflix a $2.8 billion termination fee. That payout significantly lifted Netflix’s net income and therefore EPS. Stripping out the one-time fee, Netflix’s EPS would have missed consensus estimates. That helped contribute to the stock’s nearly 10% decline in after-hours trading, since the breakup-fee benefit had already been disclosed and was largely priced in. Another factor weighing on sentiment was Netflix’s softer-than-expected guidance for the next quarter. Management forecasted revenue of $12.57 billion, or 13.5% YOY growth, versus estimates of $12.64 billion. The company also expects next-quarter operating margin to fall 150 basis points YOY to 32.6% — although that would be a 30 basis point improvement compared with Q4 FY2025. Netflix kept its full-year guidance range of $50.7 billion to $51.7 billion (about $51.2 billion at the midpoint), slightly below the Street’s $51.37 billion estimate. Hastings' Departure Causes JittersInvestors were also unsettled by the news that Reed Hastings will not seek re-election to Netflix’s Board of Directors. Hastings co-founded Netflix in 1997, served as CEO for 25 years, and has been its board chairman. He will remain chairman through June and then plans to focus on philanthropy and other ventures. His decision marks the end of an era for a leader who helped shape the company’s strategy and culture. On the earnings call, one analyst asked whether the pursuit of WBD influenced Hastings' decision to step down. Hastings has long embraced a “build over buy” mentality, favoring organic growth over large acquisitions. If the WBD pursuit had driven his departure, it would suggest disagreement at the top. Co-CEO Ted Sarandos pushed back hard on that idea, saying, “Reed was a big champion for that deal,” and adding that the board unanimously supported it and that it had “absolutely nothing to do” with Hastings' decision. Still, the timing is notable: after pursuing one of the largest deals in media history, Hastings chose to depart months later. Either way, Hastings' exit raises questions about the future of Netflix’s board leadership and long-term governance. Live Sports and Ads: Critical Levers for Netflix’s Future GrowthSustaining growth will be key to NFLX’s ability to move higher over the long term. Live sports are one of the clearest avenues for that growth. During the quarter, Netflix’s broadcast of the World Baseball Classic (WBC) performed very well: the WBC was its most-watched program ever in Japan and drove the largest single-day sign-ups the company has seen in that market, with Japan leading Netflix’s total Q1 membership growth. This success builds on the massive viewership Netflix has generated from broadcasting NFL games and the Mike Tyson vs. Jake Paul boxing match. Notably, the WBC was the company’s first large live event outside the United States. These events provide a repeatable playbook that Netflix can use in both U.S. and international markets to boost membership. Netflix’s ad business also appears on track. The company expects to double advertising sales to $3 billion in 2026 and reported a 70% YOY increase in its advertiser base to about 4,000 companies. As the advertiser base grows, Netflix should be able to improve ad targeting and, over time, generate more revenue per ad as marketers extract greater value from the platform. |
Post a Comment
Post a Comment