Key Takeaways
- Netflix’s Q2 2026 earnings arrive Thursday after market close, with Wall Street projecting EPS of $0.79 and revenue reaching $12.58 billion
- Shares have declined 21% this year to $73.78, significantly underperforming the S&P 500’s 11% gain
- Current valuation stands at 19.9x forward earnings — a substantial discount from its five-year average of 32.4x
- Guggenheim identified Netflix as its leading short candidate for Q2 earnings season, despite maintaining a Buy rating and $120 target price
- Major worries center on viewer engagement patterns, artificial intelligence-powered content disruption, and intensifying rivalry from a possible Paramount Skydance–Warner Bros. Discovery combination
Thursday’s earnings announcement carries significant weight for Netflix. After a difficult 2026, shareholders are demanding clarity.
The streaming giant will unveil Q2 2026 financial results following Thursday’s closing bell. Consensus estimates from FactSet point to adjusted earnings per share of $0.79 and total revenue of $12.58 billion — representing year-over-year revenue growth of 13.5%.
Shares peaked at a record $133.91 on June 30, 2025. From that high, the stock has plummeted approximately 45%, bringing year-to-date losses to 21% at the current price of $73.78.
NFLX now carries a forward earnings multiple of 19.9x. This represents a significant markdown from the five-year average of 32.4x, suggesting potential value for investors.
Ahead of the earnings release, Guggenheim confirmed its Buy rating alongside a $120 price objective, while simultaneously revealing that Netflix emerged as the leading short position in its survey data for Q2.
Jessica Reif Ehrlich from BofA Securities maintains a Buy stance with a $125 target. In a Tuesday note, she observed that investor sentiment remains “muted,” suggesting a strong earnings beat coupled with raised guidance “could go a long way” toward alleviating market concerns.
Both Morgan Stanley and KeyBanc reduced their price objectives — to $90 and $92 respectively — while maintaining Overweight recommendations. Each firm highlighted concerns about user engagement metrics and longer-term expansion obstacles.
Evercore ISI preserved its Outperform rating at a $115 target, anticipating Netflix will achieve management’s guidance. Rosenblatt continues with a Neutral rating and $95 price target.
Intensifying Competitive Pressures
Paramount Skydance emerged victorious over Netflix in competing to purchase Warner Bros. Discovery. Should regulators approve the transaction, it would establish a formidable new competitor in the streaming landscape.
Beyond conventional streaming platforms, TikTok and YouTube continue capturing viewer attention. Netflix has countered with short-form video clips, video podcast offerings, and always-available channels — though questions remain whether subscribers welcome Netflix adopting YouTube-like features.
Guggenheim is monitoring several key indicators: the TF1 partnership debut, expanded short-form and podcast initiatives, and the July 13 MLB Home Run Derby as signals of how these new content strategies resonate with audiences.
The Path to 2030
A critical question facing investors: can Netflix deliver on its 2030 strategic framework? According to Wall Street Journal reporting from April 2025, that roadmap envisions $78 billion in total revenue, $9 billion from advertising, $30 billion in operating income, a 38% operating margin, and 410 million subscribers.
Following the unsuccessful WBD acquisition attempt, Netflix greenlit a $25 billion stock repurchase program. Leadership characterized WBD as a “nice to have” opportunity, noting Netflix has strengthened its “M&A muscle.”
Guggenheim projects 2026 adjusted EPS at $3.24, excluding the WBD deal termination fee, placing the stock at approximately 1.2x PEG ratio.
Ehrlich expressed confidence in NFLX’s long-term prospects, citing sustained subscriber growth momentum, expanding advertising revenue streams, and emerging live content possibilities.
Netflix’s earnings release is scheduled for Thursday after market close.
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