Netflix (NASDAQ:NFLX) provides streaming entertainment services worldwide and closed Friday at $97.31, down 9.72%. The stock moved lower after Q1 results paired strong profits with softer-than-expected Q2 guidance and leadership changes. Trading volume reached 124.7 million shares, about 152% above its three-month average of 49.4 million shares. Netflix went public in 2002 and has grown 81,236% since then.
The broader markets advanced Friday, with the S&P 500 rising 1.19% to 7,125 and the Nasdaq Composite gaining 1.52% to finish at 24,468. Within the entertainment industry, peers Walt Disney closed at $106.28, up 2.29%, while Warner Bros. Discovery ended at $27.47, up 0.29%, as investors weighed cost cuts and consolidation risk.
Netflix reported Q1 earnings yesterday afternoon, seeing sales rise 16% and EPS soar 86% (thanks partially to the $2.8 billion WBD termination fee), which sailed past Wall Street’s expectations. However, co-founder and board chair Reed Hastings announced that he would not seek reelection to the board. This downbeat news, paired with revenue guidance for 12% to 14% growth in 2026, underwhelmed the market, prompting today’s decline.
Ultimately, I’d argue everything looked fine. Advertising revenue is on track to double to $3 billion in 2026. Netflix’s coverage of the World Baseball Classic was the most-watched event ever in Japan and led to record signups in the region. As the company leans into sports content, new gaming ideas, international markets, and AI initiatives, its forward P/E ratio of 31 seems pretty reasonable.
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