Netflix stock plunges to 52-week low following mixed earnings report
Netflix stock plunged 9% on Friday morning to $67.74 a share, after the streamer’s second quarter earnings report renewed concerns among investors and analysts about the streamer’s future growth.
The Los Gatos-based company on Thursday narrowed its 2026 forecast to $51 billion to $51.4 billion from $50.7 billion to $51.7 billion, causing equity analysts to cut their estimates. The stock reached a new 52-week low on Friday and is down 49% from a year ago.
“This outlook likely reinforces investor concerns,” wrote analysts from Guggenheim Securities in a research note on Friday, which has a “buy” rating on the stock.
Netflix did not immediately respond to a request for comment on its declining stock price.
Investors have been skittish about the amount of time people spend on the streaming platform. Netflix’s share of TV viewing time in the U.S. has steadily declined in recent months as YouTube has gained market share, according to Nielsen data.
Investors are concerned that if people spend less time watching Netflix, it could cause people to cancel their subscriptions and make it more challenging for Netflix to raise prices in markets like the U.S.
Netflix said engagement is healthy on its platform and its programs continue to draw large audiences with popular shows like crime drama series “I Will Find You.”
Netflix said subscribers watched more than 97 billion hours on the streaming service in the first half of the year, up 2% from a year ago.
“We are increasingly concerned that younger generations are less interested in long form content as their time migrates to ‘free’ social media platforms,” wrote Jeffrey Wlodarczak, CEO of Pivotal Research Group in a report on Friday, who has a hold recommendation on Netflix stock. “We believe this will result in slower subscriber growth and attempts by the company to offset this via more aggressive price increases and investment in content.”
Netflix executives in a Thursday earnings presentation emphasized that measuring engagement at the company goes beyond hours spent watching the streaming service.
“There is not a linear relationship between view hours and revenue and profit because all hours are not created equal,” said Greg Peters, Netflix co-CEO on an earnings presentation on Thursday. “All hours don’t provide the same kind of value to the business.”
The streamer said it plans to allocate just over 5% of its content spend on live programming this year. Live content has been a key driver for subscriptions, accounting for six of the top 10 new member sign-up days over the last five years, the company said, even though it makes up roughly 1% of overall watch time this year.
The company is also diversifying the content it offers on its platform, adding live sports games and video podcasts, in addition its large library of TV shows and movies.
Netflix revenue rose 13% to $12.6 billion in the second quarter. Net income was $3.4 billion, up 9% from a year ago.
The company said its advertising business is on track to reach $3 billion in revenue this year, double the amount in 2025.