Unable to deliver another "explosive" performance, Netflix (NFLX.US) stock price is under pressure, but Wall Street still sees its advertising and long-term growth positively.

Streaming giant Netflix (NFLX.US) released its fourth quarter financial report for 2025 on Wednesday. Despite the company's quarterly revenue and profit both exceeding market expectations, and the full-year performance guidance basically matching Wall Street's forecasts, the market sentiment weakened due to the company's failure to deliver another "blowout" performance, causing Netflix's stock price to plummet significantly. As of the time of writing, Netflix fell more than 4.6%, to $83.28. Investment bank: Market has become accustomed to "beating expectations", advertising potential underestimated Wade Bush believes that this financial report was interpreted by the market as "slightly flat", mainly because investors have become accustomed to Netflix consistently delivering results far exceeding expectations. However, the institution emphasized that Netflix's global advertising business is entering an accelerated realization stage. Wade Bush pointed out that Netflix's advertising revenue is expected to double to about $3 billion in 2026, and continue to release growth potential in 2027 and beyond, especially if the company can complete its related transactions with Warner Bros. Discovery (WBD.US) next year. The bank maintains an "outperform the market" rating with a target price of $115. Long-term growth path still viewed favorably Jefferies Financial Group Inc. described Netflix's fourth quarter financial report as "mixed", but still believes the company will continue to maintain a dominant position in the global streaming industry. The bank expects Netflix's revenue and free cash flow to grow at compound annual rates of over 10% and 15% respectively over the next five years. The institution also pointed out that Netflix management reiterated its long-term goals for 2030, including achieving $80 billion in revenue, $30 billion in operating profit, and 410 million subscribers, while the revenue growth guidance of 12% to 14% for the 2026 fiscal year is slightly higher than their previous expectations. Morgan Stanley maintains a bullish stance Morgan Stanley continues to be optimistic about Netflix, believing that the company has the ability to achieve an average annual earnings growth of over 20% by 2028. The bank noted that from an annual perspective, Netflix's performance remains strong, and the latest guidance suggests that the company is likely to achieve double-digit revenue growth for multiple years and simultaneously drive an expansion in profit margins. Morgan Stanley also mentioned that Netflix's global membership exceeded 325 million in 2025, with a net increase of over 25 million users for the year. Despite having the industry's largest user base, Netflix still leads other major streaming platforms. Short-term pressure but long-term logic remains unchanged Needham believes that Netflix's strong performance in the fourth quarter, strong content reserves for 2026, international market growth driven by local original content, and diversification into related businesses such as voting, podcasts, and gaming, are all positive factors. Canaccord Genuity pointed out that while Netflix's fourth quarter revenue and operating profit both exceeded expectations, the first quarter operating profit guidance is slightly lower than market consensus, mainly due to the rise in content amortization costs in the first half of 2026. The bank believes that the recent stock price pullback actually provides an attractive entry window for medium to long-term investors. Analyst opinions vary Some independent analysts believe that Netflix's core business is still steadily growing, advertising revenue is accelerating, profit margins are expanding, and after a significant decline in valuation, it has become more attractive; however, there are also views that if the company's long-term growth falls to a "teenage" level as the norm, the market may need to reassess its valuation, especially in the case of potential mergers leading to increased financial leverage.