Netflix shares tumble 10 per cent as growth fears and data cuts spook investors
Analysts warn that reduced transparency comes at a critical juncture, with the stock nearing a two-year low amid slowing revenue forecasts and increased competition.
Netflix shares fell more than 10 per cent on Friday, erasing approximately $35 billion from its market capitalisation and pushing the stock close to a two-year low. The decline followed the company’s forecast of slower revenue growth for the upcoming quarter and its announcement that it will reduce the frequency of viewership data reporting from twice a year to once annually, effective from 2027. The move has intensified investor concerns that the streaming giant’s period of industry-leading expansion may have peaked.
The reduction in disclosure marks a significant shift in transparency, following the scrapping of subscriber counts last year. Ben Barringer, head of technology research at Quilter Cheviot, noted the market’s reaction was predictable given the timing. "Whenever you take away a data point from investors when results aren't as good as they have been you will get punished by the market," Barringer said. The pullback in engagement reporting has drawn criticism, with Forrester research director Mike Proulx describing the move as sending a "strong 'nothing to see here' vibe" at a moment when subscriber retention is under scrutiny.
Investor sentiment has been further dampened by a perceived weaker content lineup for the current year compared to the strong slate in 2025, which featured the final season of "Stranger Things" and the hit series "Squid Games". Analysts suggest this shift could weigh on growth in the near term. Additionally, Netflix’s failed pursuit of Warner Bros earlier this year has raised doubts about its next phase of expansion, while the adoption of its ad-supported streaming tier, previously touted as a major growth driver, has been described as slow.
The stock has lost 44 per cent since hitting an all-time high in June 2025, including a fall of over 20 per cent in the current year. Despite the recent downturn, Netflix continues to trade at a significant premium to its peers, valuing the company at nearly 20 times expected earnings over the next 12 months. This compares to 13.5 times for Walt Disney and 6.6 times for Comcast, reflecting the higher valuation investors have historically placed on Netflix’s subscriber base relative to traditional media companies grappling with cable declines.
At least 18 analysts have cut their price targets after Netflix forecast quarterly revenue and earnings below Wall Street expectations. However, the median analyst price target remains approximately 40 per cent above the Thursday closing price. As the company faces increased competition from traditional media firms and YouTube, keeping subscribers engaged remains critical to justifying its premium valuation in an increasingly crowded market.
