Netflix is down 42% from its high and trading cheaper than the S&P 500, the July 16 earnings are going to be fascinating
u/ConsistentWeirdo ·
Reddit — r/stocks
· July 09, 2026 at 11:34
· ⬆ 68 pts
· 💬 45 comments
| View on Reddit ↗
AI Summary
Summary
Post discusses Netflix’s 42% decline from its high, attributing it to sentiment factors (Hastings departure, acquisition noise) despite strong business fundamentals (16% revenue growth, 32.3% operating margin, ad revenue doubling).
Thesis: The market has overpriced the strategic risk of Hastings leaving; upcoming Q2 earnings (July 16) could be a catalyst if margin guidance holds and ad revenue path is clarified.
Quality assessment: Well-researched DD – includes specific revenue, margin, and ad metrics, identifies a clear sentiment‐driven disconnect with a near‐term catalyst.
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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.
Is the hastings departure a genuine strategic risk or has the market completely overpriced it?
Q1 revenue beat at $12.3B (+16% YoY), operating margin 32.3%, ad-tier viewers 250M, ad revenue doubling to $3B this year. The 42% drop is mostly sentiment (Hastings exit, acquisition noise) while business metrics remain strong; July 16 earnings can trigger a re‑rating if numbers hold. Buy NFLX ahead of Q2 earnings as the sentiment‑driven discount may correct on any positive guidance for H2 content amortization and ad revenue trajectory. Q2 margin misses guidance; Hastings departure leads to strategic missteps; broader market sell‑off; acquisition rumors cause further uncertainty.
This Reddit post, published July 09, 2026,
features u/ConsistentWeirdo
discussing NFLX.
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