via ConsistentWeirdo
NFLX has had one of the stranger years of any large cap in 2026 as its down 42% from its nov high, Reed hastings officially departed as chairman which is end of an era for a company he built from a dvd rental service,also acquisition rumors swirling after comcast announced it’s spinning off nbcuniversal with reuters citing netflix as a potential buyer before comcast’s ceo shut it down immediately.
And yet the actual business metrics look fine,Q1 revenue $12.3 billion up 16% year over year beat expectations. Operating margin is 32.3% and Ad supported tier at 250 million monthly active viewers. Ad revenue is also doubling to $3 billion this year.
The disconnect between the business performance and the stock price is almost entirely sentiment driven as hastings leaving spooked people. Acquisition noise created uncertainty and content spend is front loaded into H1 which compresses near term margins.
July 16 is the real test as Q2 consensus is $12.57 billion revenue and $0.79 EPS and content amortization peaks this quarter then decelerates into H2 so if operating margin comes in at or above the 32.6% guided number and management provides any clarity on the path to $9 B in ad revenue by 2030 this stock moves.
At 24x earnings with 13-14% revenue growth and a massive ad business building underneath it might be an interesting setups,for EU bitpanda added NFLX to their margin trading feature this week which is either a great timing for EU traders or a sign the bottom is already in depending on how July 16 goes
Is the hastings departure a genuine strategic risk or has the market completely overpriced it?