FRANKFURT / LONDON (IT BOLTWISE) – Netflix shares took a hit even as the company continued to post strong revenue growth. In pre-market US trading, the shares fell by 6.7 percent, which dampened investor sentiment. Despite an annual increase of 32 percent, the share remains caught in a sideways movement.
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Netflix shares saw a significant decline of 6.7 percent to $1,158 in premarket US trading on Wednesday. This was despite continued strong business growth, which failed to impress investors. The decline pushes the price increase for the current year to around 32 percent, while the share price has remained in a sideways movement since its record high at the end of June.
With a market capitalization of over $525 billion, Netflix is significantly more valuable on the stock market than its competitors Walt Disney, Comcast and Warner Bros. Discovery combined. Netflix shares first topped $1,000 in February, but fell back to nearly $800 in April amid U.S. government tariff announcements before recovering to hit a record high of $1,341 in late June.
The company reported a 17 percent increase in revenue to $11.5 billion last quarter. Netflix no longer discloses subscriber numbers, which is why revenue development is now considered the main indicator of business growth. Co-CEO Ted Sarandos mentioned that Netflix is nearing one billion viewers.
Earnings per share were $5.87, significantly missing analysts’ expectations. Netflix attributed this to an ongoing dispute with tax authorities in Brazil, but does not expect a long-term impact on results. Profit rose year-on-year by almost eight percent to $2.55 billion.
Analysts like JPMorgan’s Doug Anmuth see both the past quarter and the outlook for the current quarter as solid, although market expectations could fall slightly. Netflix is keeping the option open for selective acquisitions, but has not yet made any major acquisitions.
James Heaney of Jefferies described the results as mixed and criticized the lack of guidance for 2026, which could lead to uncertainty over growth. Nevertheless, the long-term growth story remains intact, with expected double-digit sales growth and an increase in profitability.
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