NEW YORK, July 17, 2026, 06:11 (EDT) – Shares of Netflix NASDAQ:NFLX dropped, erasing $30 billion in market value, after the company’s forecast fell 1.1% short of expectations.
Netflix, Inc. NASDAQ:NFLX dropped 9.6% to $67.20 in premarket trading Friday, signalling a possible $30.1 billion loss in market value. U.S. cash markets had yet to open.
The projected loss was greater than Netflix’s $27.1 billion still available for share buybacks. It matched roughly 6.4 quarters of repurchases at the record-setting pace seen in the second quarter.
The shortfall in the quarterly forecast was less pronounced. Third-quarter revenue guidance was $140 million, or 1.1%, below analysts’ expectations. Earnings guidance missed by two cents, a 2.4% difference. The shortcoming indicates that investors are reducing their outlook for future growth.
| Measure | Netflix or market | Comparator | Difference |
|---|---|---|---|
| Third-quarter revenue forecast | $12.86 billion | LSEG LON:LSEG consensus: $13.00 billion | -$140 million, or 1.1% |
| Third-quarter EPS forecast | $0.82 | Consensus: $0.84 | -$0.02, or 2.4% |
| Estimated market value change | -$30.1 billion | Available buyback funds: $27.1 billion | 1.11 times capacity |
| Forward price/earnings ratio | 19.92 times | Walt Disney NYSE:DIS: 13.54 times | 47% higher |
| Forward price/earnings ratio | 19.92 times | Comcast NASDAQ:CMCSA: 6.57 times | 203% higher |
The initial estimate is based on 4.21 billion shares and a $7.15 drop in premarket trading. Additional figures are sourced from Netflix’s shareholder letter and analyst projections.
Netflix forecasts third-quarter revenue to rise by 11.7%, representing its slowest pace since late 2023. This is the second consecutive quarter that its guidance has missed analyst expectations.
The quarter showed stability. Revenue increased by 13.4% to $12.56 billion. The operating margin slipped to 33.4% from 34.1%. Diluted EPS climbed to 80 cents from 72 cents.
Netflix reported free cash flow at $1.53 billion, down from $2.27 billion. The company maintained its full-year target of around $12.5 billion. Revenue guidance narrowed to a range of $51.0 billion to $51.4 billion, while the operating margin target remained at 31.5%.
Netflix will reduce the frequency of its operating disclosures, moving to annual reporting of viewing-hours data from 2027. The company had ended quarterly subscriber updates in 2025. Viewing hours for the first half increased 2% to over 97 billion.
Management says not all viewing hours are equally valuable. Live content accounts for slightly more than 5% of content costs and around 1% of total views. Still, it delivered six out of Netflix’s top 10 days for new signups in the past five years.
“There is a lack of excitement in the story,” said Jeffrey Wlodarczak, an analyst at Pivotal Research. Paolo Pescatore of PP Foresight referred to it as “a growth profile that is maturing naturally,” instead of experiencing a rapid decline. Reuters
At least 11 analysts cut their price targets following the release. The valuation premium is still significant. Netflix is trading 47% higher than Disney’s forward multiple and around three times that of Comcast.
As of Thursday, Netflix was up 1.3% on the week. The premarket price of $67.20 set the stock up for an 8.4% weekly drop.
Friday’s cash session will gauge the move below the previous $70.86 yearly low. Next week, investors are set to monitor analyst estimates and U.S. advertising commitments due in the coming weeks.
Risks: Premarket moves may reverse due to lighter volumes. Fluctuations in currencies, timing of content, customer churn and ad performance can impact projections. The buyback approval does not guarantee any repurchase.
Friday’s reaction reflected expectations of a more prolonged slowdown than the gap in guidance suggested. Maintaining Netflix’s premium will now rely on increased advertising revenue and consistent margins.
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