Netflix Reports Growth Amid Stock Decline
Netflix (NASDAQ: NFLX) reported strong fourth-quarter growth with 325 million subscribers, an 8% year-over-year increase. The company generated $12.05 billion in revenue, exceeding analysts’ expectations of $11.97 billion, driven by significant ad revenue growth to $1.5 billion, a 250% increase. Despite these results, Netflix shares are down over 37% from recent highs and 11% lower year-to-date.
While the U.S. and Canada regions saw revenue jump 18% to $5.3 billion, the company has cautioned about future earnings growth, forecasting a 15% revenue increase for Q1 and annual revenue between $50.7 billion and $51.7 billion. This indicates a deceleration in growth compared to previous years, with an anticipated operating margin of 31.5%.
As Netflix is set to acquire Warner Bros. Discovery’s studio and streaming assets, including popular franchises like Game of Thrones and Harry Potter, it positions itself for potential growth in ad revenue and viewership. The current stock price offers a more reasonable valuation, trading at a forward price-to-earnings ratio of 26 times 2026 estimates.
