A person scrolls through a TV screen displaying icons for Netflix and Amazon Prime. (Photo: THE CANADIAN PRESS/Giordano Ciampini)
Netflix's shares slipped by over 4% on Friday after the company’s latest revenue forecast left investors underwhelmed. Despite strong anticipation, the numbers failed to deliver the punch many expected — largely because the boost in projected revenue stemmed more from currency shifts than from real content-driven growth.
For over a year, Netflix has been riding high. The platform saw its stock nearly double as global viewers tuned in for hits like the final season of Squid Game. That momentum had Wall Street betting on big results. But while Netflix raised its yearly revenue forecast, it wasn't due to a surge in new users or fresh content appeal — it was because the U.S. dollar got weaker.
The updated projection now sits between $44.8 billion and $45.2 billion, compared to the previous estimate of $43.5 billion to $44.5 billion. This change might look like progress on the surface, but many investors weren’t impressed once they realized the increase was based on currency values and not actual business growth.
“When your stock is already priced for perfection, even good news isn't always enough,” said Michael Ashley Schulman of Running Point Capital Advisors. He added that the currency-related gains might not last in future quarters.
Over the past year, Netflix introduced a series of bold moves — cracking down on password sharing, offering more sports content, and rolling out a cheaper ad-supported plan. These shifts did bring in millions of new viewers in 2024. However, Netflix made a surprising change: it stopped sharing subscriber numbers, choosing instead to focus on revenue and profits. That move has made some investors uneasy, as it’s harder to measure actual growth.
The company's market value now stands at a massive $517 billion, greater than the combined value of Disney, Comcast, and Warner Bros. Discovery. In the most recent quarter, Netflix reported earnings of $7.19 per share, slightly above the expected $7.08, according to LSEG data.
Despite the lukewarm reaction, some analysts remain hopeful. Seth Shafer from S&P Global Market Intelligence said the second half of the year looks promising, especially with a strong lineup of new shows and a growing advertising model that could boost earnings further.And many on Wall Street agree. At least 16 analysts raised their stock price targets after the earnings call. The new median target stands at $1,385, showing that there’s still plenty of long-term faith in Netflix’s direction — even if Friday’s results didn't quite spark excitement.
