NEW YORK, Jan 20, 2026, 05:04 EST
- Options markets are betting on about a 7% swing in Netflix shares following Tuesday’s earnings.
- Analysts are expecting revenue of $11.97 billion and earnings per share to hit $0.55
- Questions around the Warner Bros. Discovery deal and a competing bid from Paramount Skydance continue to weigh heavily
Options traders are gearing up for a volatile session in Netflix shares Tuesday, with the company’s fourth-quarter results looming and its Warner Bros. Discovery bid casting a shadow over the stock.
The setup matters because Netflix shares have dropped almost 30% since October, when an unexpected tax charge sparked an earnings miss and the stock fell 10% the following day. On top of that, deal uncertainty has piled on the pressure, with a competing bid from Paramount Skydance and political resistance keeping investors jittery.
Expectations for volatility have climbed, driven by both the earnings release and executives’ comments on financing and timing. A slight shift in tone regarding the deal could quickly alter the stock’s near-term trading dynamics.
Options tied to Netflix are signaling a roughly 7% price swing by week’s end. With shares closing near $88 on Friday, that suggests a move up to about $94 or down below $82. 1
Wall Street is looking for Netflix to report revenue of $11.97 billion, a jump of roughly 17%, according to estimates from Visible Alpha. Analysts also expect earnings per share to hit $0.55, marking an approximate 30% rise. (Earnings per share represents profit divided by the number of shares.)
Netflix plans to release its earnings and guidance shortly after the market closes, around 1:01 p.m. Pacific time, followed by a live video interview and a Q&A session with analysts. Investors will be watching closely for updates on the company’s ad business as well as its expansions into live sports and gaming. 2
Earlier this month, Goldman Sachs analysts told clients they anticipate results will “reflect a solid end to 2025 as management continues to execute well.” They also highlighted that questions about deals—covering regulatory risks and the operating plan through to closing—are likely to take center stage in the discussion.
Despite Netflix’s recent slide, most analysts followed by Visible Alpha still give it a buy rating, with the average price target sitting at $135. Targets have been moving as investors weigh whether the Warner deal will boost growth or weigh down the stock’s valuation.
Last week, KeyBanc’s Justin Patterson lowered his price target from $139 to $110, noting that “Barring an earlier-than-expected price increase,” he anticipates 2026 revenue growth to hover around 13%. Meanwhile, TipRanks’ options-based “at-the-money straddle” — a volatility play combining a call and put at the same strike — suggests a 7.78% move after earnings. 3
The battle over the deal is intensifying. Warner Bros. Discovery’s board has advised shareholders to turn down Paramount Skydance’s proposal, pointing to concerns over its financing. “The Board unanimously determined that the Paramount’s latest offer remains inferior to our merger agreement with Netflix across multiple key areas,” said chair Samuel A. Di Piazza Jr. 4
Netflix still faces an easier test: the upcoming quarter. If profits fall short, guidance feels cautious, or funding details remain unclear, the selloff could deepen. That risk looms large, with options markets already pricing in a broad spectrum of potential moves.
Traders are currently hedging bets on both ends, bracing for the outcome. When the dust settles, the narrative might shift from “earnings versus deal” to how closely intertwined the two really are.
