•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Shares of Netflix fell in after-hours trading on Thursday after the company released its first-quarter earnings report, dropping to about $98.
While Netflix continues to expand, the market’s negative reaction reflected concerns about slowing revenue momentum and an outlook that suggests the slowdown may deepen in the near term. The stock’s premium valuation also leaves limited room for weaker-than-expected performance as competition in streaming intensifies.
Netflix reported first-quarter revenue of $12.3 billion, up 16.2% from roughly $10.5 billion in the year-ago quarter. Profitability improved as earnings per share rose to $1.23 from $0.66 a year earlier.
However, top-line momentum cooled. The company’s 16.2% year-over-year revenue growth in the first quarter of 2026 was slower than the 17.6% growth rate Netflix posted in the fourth quarter of 2025.
Management’s second-quarter outlook implies further deceleration. Netflix forecast year-over-year revenue growth of 13.5% for the second quarter.
The company also reiterated full-year guidance for revenue growth of 12% to 14%, or 11% to 13% when adjusted for foreign exchange. The midpoint of the full-year outlook suggests slower growth than investors may have been expecting given the stock’s valuation.
Even after the after-hours decline to around $98, Netflix trades at about 32 times earnings, with the first-quarter earnings surge already reflected in the earnings figure.
The valuation implies expectations for sustained, robust double-digit growth and continued margin strength. That assumption faces pressure in a competitive streaming environment where well-capitalized technology and media companies are investing heavily in premium content and live programming.
Management described the entertainment business as dynamic and highly competitive. The article also cited examples of rivals expanding their offerings, including Apple’s exclusive streaming partnership with Formula 1 and Apple TV being bundled with other Apple services, as well as Apple TV availability alongside rival streaming service Peacock.
The article argues that the current share price provides limited margin of safety if revenue growth falls toward the low double digits. It presents a scenario in which Netflix’s price-to-earnings multiple contracts to around 22, a level described as more consistent with a maturing profile.
Under that scenario, the stock would trade closer to $68, implying roughly 30% downside from the $98 after-hours price.
The article notes that this is a cautionary exercise rather than a direct call to sell. It acknowledges that Netflix could potentially sustain strong growth longer than expected, which could justify the current valuation.
Still, the central message is that investors should consider how price reflects expectations, and that the combination of slowing revenue momentum, guidance for further deceleration, and a high valuation increases the importance of being selective about entry points.
Premium gym chains are entering a “golden era” that is ending or already in decline, as rising operating costs collide with shifting consumer preferences toward more flexible, community-based ways to exercise. Long-term memberships are shrinking, margins are pressured by higher rents and facility expenses, and competition from smaller, more personalized…
