Netflix Stock Falls as Warner Bros. Deal Faces Hostile Challenge

Netflix, Inc. (NASDAQ: NFLX) stock is under pressure again on December 9, 2025, as Wall Street digests a rare combination of events: a giant, high‑risk media acquisition, a surprise hostile counterbid, fresh analyst downgrades, and a rapidly scaling ads business that’s quietly becoming a second growth engine.

As of mid‑day Tuesday, Netflix shares trade around $96.79, down about 3.4% from the prior close and roughly 28% below their record high from six months ago, putting the stock near its lowest level since April. ^[1]

Yet over the last 12 months, Netflix has still delivered a near‑doubling in total return (about 92%), far outpacing the broader market—even as valuation, regulatory risk, and deal uncertainty now drive a sharp pullback. ^[2]

Below is a detailed rundown of the latest news, forecasts, and analysis around Netflix stock as of December 9, 2025.

Netflix Stock Today: Price, Performance and Sentiment

Current price: ~$96.79 (Nasdaq; mid‑session, Dec 9, 2025)
1‑year performance: ~+92% total return from December 2024 to December 2025, according to 24/7 Wall St. ^[3]
Recent drawdown: Shares are down ~28% from their record high six months ago, and hit their lowest level since April 2025 after the latest takeover twist. ^[4]
Volatility: Netflix’s beta is about 1.7, meaning it tends to move more sharply than the overall market. ^[5]

The stock’s slide has been driven less by Netflix’s core streaming performance and more by concern over a huge, complex acquisition of Warner Bros. Discovery’s studios and streaming assets—and the possibility that Netflix might lose the deal or be forced to overpay.

The Warner Bros. Mega‑Deal: Netflix’s $72–83 Billion Gamble

On December 5, 2025, Netflix unveiled a landmark agreement to acquire Warner Bros. Discovery’s TV and film studios plus its streaming division (including HBO Max) in a deal valued at about $72 billion in cash and stock, or roughly $83 billion including assumed debt. ^[6]

What Netflix Is Buying

According to Reuters and Finbold’s summary of Wall Street views, the deal would give Netflix control of some of Hollywood’s most valuable IP and infrastructure: ^[7]

Franchises & brands: Game of Thrones, DC Comics, Harry Potter, Hanna‑Barbera, and Warner’s deep film and TV library
Streaming assets: HBO Max and associated direct‑to‑consumer tech
Production muscle: Warner’s historic studio lot, global production footprint, and theatrical distribution capabilities

Under the current structure:

Warner Bros. Discovery plans to spin off its linear TV and cable networks into a separate entity (Discovery Global).
Netflix would then acquire the remaining studios and streaming operations.
The deal is expected to close in late 2026, subject to regulatory approvals in the U.S. and Europe. ^[8]

Strategic Rationale

Supportive analysts argue the deal could: ^[9]

Cement Netflix as the undisputed global streaming leader by combining Netflix and HBO Max under one umbrella.
Deepen Netflix’s library with prestige franchises that can feed films, series, games, consumer products, and theme‑park‑style experiences.
Generate $2–$3 billion in annual cost synergies by year three, mainly from tech, marketing, and overlapping overhead.
Be earnings‑per‑share (EPS) accretive by FY 2028, according to Oppenheimer, which values the transaction at about 4.5 years of Netflix’s forward free cash flow. ^[10]

Netflix has also agreed to a break‑up fee of around $5.8 billion if it walks away, and Warner Bros. Discovery would owe a substantial fee if it accepts a competing offer. ^[11]

Regulatory Overhang

The combination of Netflix and HBO Max is already drawing antitrust scrutiny on both sides of the Atlantic, with critics warning the deal could reduce competition and hurt consumers and cinema operators. ^[12]

Complicating things further, U.S. President Donald Trump has publicly criticized the Netflix–Warner tie‑up, arguing that it could give Netflix too much power in streaming and hinting that regulators should not rubber‑stamp it. ^[13]

For investors, that means years of regulatory risk layered on top of standard execution and integration challenges.

Paramount’s $108 Billion Hostile Bid: The Plot Thickens

Just as the market was starting to process Netflix’s bold move, Paramount Skydance threw a wrench into the script.

On December 8, 2025, Paramount launched a hostile all‑cash bid of about $108.4 billion (roughly $30 per share) for Warner Bros. Discovery—explicitly challenging Netflix’s earlier agreement. ^[14]

Key elements of the emerging bidding war:

Paramount’s offer is roughly 50% richer in headline value than Netflix’s $72 billion proposal, and covers all of WBD, including cable networks. ^[15]
Netflix’s deal focuses on studios and streaming, with Warner spinning off its linear networks beforehand. ^[16]
WBD shares jumped as markets priced in the possibility of a bidding war or improved terms, while Paramount stock rose on optimism about scale. ^[17]

Market Reaction: Netflix Sells Off, Downgrades Hit

The Economic Times reports that Netflix shares fell more than 3% on Monday, hitting their lowest level since April, after news of Paramount’s hostile offer. ^[18]

Analysts quickly weighed in:

Rosenblatt Securities cut Netflix from Buy to Neutral and slashed its price target from $152 to $105, citing the risk that returns from the Warner deal depend heavily on “speculative” monetization of the film and TV library and a prolonged closing timeline. ^[19]
Pivotal Research also downgraded Netflix to Hold and reduced its target from $160 to $105, flagging the 18–24 month closing period and potential for a bidding war to drive costs higher. ^[20]
Needham’s Laura Martin, by contrast, reiterated a ‘Buy’ rating on December 9 with a $150 target, highlighting Netflix’s global scale and high‑margin streaming model. ^[21]

As ChartMill put it, the story for Netflix has temporarily shifted from “relentless strategic momentum” to “execution and regulatory risk.” ^[22]

Q3 2025 Earnings: Strong Top Line, One‑Off Tax Hit

Underneath the M&A drama, Netflix’s core business remains solid, though Q3 2025 earnings did introduce some volatility.

According to Netflix’s Q3 2025 shareholder communication and multiple recaps: ^[23]

Revenue: About $11.51 billion in Q3 2025, up in the mid‑teens year over year and roughly 4% sequentially.
EPS:$5.87, missing consensus estimates around $6.9–7.0 by roughly 15–16%.
Operating margin: Around 28% in the quarter.
Net income: Roughly $2.5 billion.
Key drag: A one‑time $619 million tax expense tied to a Brazilian dispute that significantly reduced reported EPS.

Despite the EPS miss, management emphasized:

Continuing double‑digit revenue growth driven by subscriber gains, price increases, and rising ad sales. ^[24]
Record viewing share in major markets, with Q3 delivering Netflix’s highest quarterly share ever in the U.S. and U.K., according to an earnings‑call recap. ^[25]

For full‑year context, Netflix’s revenue reached about $39 billion in 2024, up from $33.7 billion in 2023 and $31.6 billion in 2022, underscoring a steady multi‑year growth trend. ^[26]

The Ad‑Supported Tier: 190 Million Monthly Active Viewers

The biggest structural change in Netflix’s business since its password‑sharing crackdown is the rapid build‑out of its ad‑supported tier.

In early November 2025, Netflix introduced a new metric, Monthly Active Viewers (MAV), and revealed that ads on the platform now reach over 190 million monthly active viewers worldwide: ^[27]

MAV counts people who watch at least one minute of ad‑supported content per month, multiplied by an estimated number of viewers per household.
This replaces a more conservative Monthly Active Users metric based on profiles, which previously put the ad tier at about 94 million MAUs.
In the U.S., the ad‑supported plan now accounts for roughly 45% of Netflix household viewing hours, highlighting how mainstream the cheaper ad tier has become. ^[28]

Netflix’s ad team and outside forecasters paint a picture of a business that is still small but scaling rapidly:

Co‑CEO Greg Peters says Netflix has just recorded its strongest quarter ever in ad sales and is on track to more than double ad revenue in 2025. ^[29]
eMarketer estimates Netflix will generate about $2.05 billion in U.S. ad revenue in 2025, rising to around $3.01 billion by 2027, and notes that ad‑supported viewers produce roughly $43.29 in revenue each, compared with $10.50 per ad‑free viewer. ^[30]
Netflix says it now has thousands of advertising clients and is rolling out interactive video ads, dynamic ad insertion for live events, and more granular demographic targeting ahead of a broader global rollout in 2026. ^[31]

In Spain alone, Netflix’s subscription with ads has surpassed 10.2 million monthly ad‑tier viewers, with more than half of new sign‑ups choosing the ad plan. ^[32]

For investors, the key takeaway is that ad‑supported streaming is quickly becoming Netflix’s second revenue engine, with much higher monetization per viewer than ad‑free plans.

Subscribers, Engagement and Market Position

Netflix’s business model remains unusually focused for a mega‑cap tech‑style name: it essentially runs one global streaming business. GuruFocus notes that Netflix has more than 300 million subscribers worldwide, giving it the largest entertainment subscriber base in both the U.S. and the international market outside China. ^[33]

DemandSage and Statista‑based data help fill in the picture: ^[34]

Regional subscribers (approx.):
- Europe, Middle East & Africa: ~101 million
- U.S. & Canada: ~89.6 million
- Asia Pacific: ~57.5 million
- Latin America: ~53.3 million
Engagement:
- The average Netflix user spends about 63 minutes per day on the platform—more than on Hulu, TikTok, YouTube, or major social networks.
- In the U.S., roughly 30% of members sign in daily and 70% weekly, underscoring stickiness and ad reach. ^[35]
Market share:
- Netflix controls about 21% of the U.S. subscription‑video‑on‑demand (SVOD) market, second only to Amazon Prime Video at 22%. ^[36]
- Surveys suggest 47% of Americans prefer Netflix over other streaming platforms, a substantial lead. ^[37]

This scale gives Netflix significant leverage over content costs, distribution, and advertising rates—even before any Warner Bros. integration.

The 10‑for‑1 Stock Split: Making NFLX More Accessible

In November 2025, Netflix executed a 10‑for‑1 forward stock split, aiming to make shares more accessible to employees and a broader base of retail investors. ^[38]

Shareholders of record as of November 10, 2025, received nine additional shares for each share held after the close on November 14.
Netflix began trading on a split‑adjusted basis on November 17, 2025. ^[39]

The split doesn’t change the company’s fundamentals or overall market capitalization, but it does help explain why pre‑split prices in older coverage (for example, above $1,200 per share) look dramatically higher than today’s sub‑$100 quotes.

Wall Street Forecasts for Netflix Stock (2025–2026)

Despite the recent downgrades, consensus sentiment on Netflix remains broadly positive, though more cautious than a few weeks ago.

Price Targets and Ratings

Different datasets converge on a similar range of 12‑month price targets:

GuruFocus (42 analysts):
- Average target: $133.37
- Range: $77.31 to $160.00
- Implied upside: ≈38% from ~$96.79
- Consensus rating: “Outperform” (around 2.0 on a 1–5 scale) ^[40]
TradingView (40 price‑target contributors, 49 ratings):
- Average target: $132.66
- Range: $92 to $152.50
- Overall analyst rating: “Buy” based on the last three months of recommendations ^[41]
TipRanks / Finbold (37 analysts):
- Consensus: “Moderate Buy” with 28 Buys, 7 Holds, 2 Sells
- Average 12‑month target: $137.65, about 37% upside from ~$100 at the time of that report
- Target range: $92 to $160 ^[42]

Individual calls worth noting:

Needham: Buy, $150 target (reiterated Dec 9). ^[43]
Canaccord Genuity: Buy, $152.50 target, unchanged. ^[44]
Oppenheimer: Outperform, $145 target, explicitly bullish on the Warner deal’s long‑term EPS accretion. ^[45]
Rosenblatt & Pivotal Research: Downgraded to Neutral/Hold with $105 targets, reflecting concerns about deal risk and extended closing timelines. ^[46]

Valuation Snapshot

24/7 Wall St. and other data providers peg Netflix at roughly: ^[47]

Forward P/E: Low‑30s (around 32–33x forward earnings)
Trailing P/E: Low‑40s (about 41–42x)
Return on equity: Roughly 43%, indicating very high capital efficiency

Those multiples are well above the broader market, but not unusual for a company growing revenue in the mid‑teens with a capital‑light model and expanding profit margins.

Key Risks for Netflix Stock Right Now

Investors considering NFLX at current levels need to weigh a number of intertwined risks:

1. Deal Risk: Overpaying or Losing Warner Bros.

Paramount’s higher, all‑cash bid introduces a real risk that Netflix may either lose the Warner assets or feel pressure to raise its own offer, further stretching its balance sheet. ^[48]
If Netflix walks away, it could face billions in break‑up fees, and if regulators block the deal after closing, value‑destruction could be severe. ^[49]

2. Regulatory and Political Uncertainty

The merger is already under scrutiny in Washington and Brussels, with critics arguing it could give Netflix too much power in streaming. ^[50]
Open opposition from the White House raises the odds of tougher conditions, delays, or outright rejection.

3. Execution Risk in Ads and Live Content

While ad revenue is growing fast, Netflix is still relatively new to live sports, dynamic ad insertion and advanced targeting. Missteps in these areas could impact ad pricing or user experience. ^[51]

4. Valuation and Volatility

Even after the pullback, Netflix trades at a premium valuation, leaving limited room for disappointment if growth slows or deal synergies take longer than expected to materialize. ^[52]
A beta above 1.7 means sharp moves both up and down are likely, particularly around regulatory headlines and earnings.

5. Intensifying Competition

Disney is merging Disney+ and Hulu into a single flagship service. Amazon is doubling down on ads across Prime Video. Paramount, if successful with WBD, could become a much bigger streaming rival. ^[53]

The Bull Case: Why Many Analysts Still Like Netflix

Despite the noise, the medium‑term bull thesis for Netflix remains intact in many analysts’ eyes:

Scale and Engagement
Netflix still commands unmatched viewing time and a leading global subscriber base, which translates into pricing power, ad reach, and content leverage. ^[54]
Ad Revenue Inflection
The jump to 190 million ad‑tier monthly viewers and the much higher revenue per ad‑supported viewer suggest a long runway for margin expansion as ads become a larger share of the mix. ^[55]
Content and IP Moat (with or without Warner)
Even before the Warner deal, Netflix’s content slate and international production machine helped drive a 92% one‑year return through early December 2025, as hits like KPop Demon Hunters and new seasons of tentpole series boosted engagement and revenue. ^[56]
Operating Leverage
Revenue has compounded from about $20 billion in 2019 to nearly $40 billion in 2024, while margins and free cash flow have improved significantly, giving Netflix flexibility to fund content and M&A. ^[57]
Potential Warner Synergies
If Netflix ultimately secures Warner’s assets on current terms, it could unlock cost savings, cross‑franchise storytelling, and a fortified negotiating position against rivals in both streaming and theatrical windows. ^[58]

The Bottom Line on NFLX as of December 9, 2025

Netflix stock is at a crossroads:

The core business—subscription streaming plus a rapidly growing ad tier—remains strong, with double‑digit revenue growth, high engagement, and improving monetization.
At the same time, the company has introduced enormous new uncertainty by pursuing one of the largest media acquisitions in history, just as a well‑capitalized rival and an activist White House step into the plot.

With shares well off their highs but still trading at a premium multiple, the market is essentially asking one question:

Will Netflix’s Warner Bros. bet turn into a transformative win—or an expensive distraction?

Over the next 12–24 months, investors will likely focus on:

How the bidding war with Paramount unfolds
Signals from U.S. and EU regulators
Netflix’s 2026 guidance, due early next year
The pace of ad‑revenue growth and new ad formats, including interactive and live‑sports integrations

For now, Wall Street consensus still leans cautiously bullish, with average 12‑month price targets about 35–40% above current levels—but with a widening spread between the most optimistic and pessimistic views. ^[59]

As always, whether Netflix is appropriate for your portfolio depends on your risk tolerance, time horizon, and diversification. NFLX has historically rewarded patient investors willing to stomach volatility—but the next leg of the story will likely be written not just on the streaming charts, but in regulatory filings and M&A negotiations.

Disclosure: This article is for informational purposes only and does not constitute financial, investment, or trading advice. Always do your own research or consult a licensed financial advisor before making investment decisions.

References

Netflix Stock Falls as Warner Bros. Deal Faces Hostile Challenge – What NFLX Investors Need to Know Now