Why Netflix Stock Dipped Lower Today

Leading global content streamer Netflix (NASDAQ: NFLX) dipped 4% as of 11 a.m. ET on Wednesday after the juggernaut reported mixed fourth-quarter earnings yesterday that narrowly beat estimates. While the market was hoping for blowout results, I think Netflix's earnings were excellent. Fourth quarter revenue grew 18%, remaining above the company's annualized five-year average of 14%. Earnings per share spiked 30%. Free cash flow (FCF) rose to $9.5 billion in 2025 -- compared to sales of $45 billion.

However, after management offered conservative guidance for 14% revenue growth and FCF of $6 billion in 2026, the market sent the stock slightly lower, possibly due to this softer outlook.

A few items from Netflix's Q4 earnings stood out to me. While global total hours viewed only rose 2% (up from 1% last year), viewing time for Netflix-branded originals rose 9%. This strong engagement with the company's own content continues to make me optimistic about the potential Warner Bros. Discovery deal, as it'd create a trove of content and brands for Netflix to reimagine.

Continue reading

Source Fool.com