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Netflix stock hits a 52-week low after earnings-but analysts say investors are missing the picture
Fortune • • business
Key Points:
- Netflix reported Q2 revenue of $12.56 billion, up 13% year-over-year but slightly below analyst estimates, with an operating margin decline to 33.4% from 34.1% the previous year.
- The company projects Q3 revenue of $12.86 billion, below Wall Street expectations, and updated its full-year revenue forecast to $51 billion-$51.4 billion while maintaining a 31.5% operating margin target.
- Netflix executed a record $4.7 billion stock buyback during the quarter, signaling management's confidence in long-term value despite recent share price declines and volatility.
- CFO Spencer Adam Neumann emphasized a focus on sustainable revenue and profit growth over quarterly results, highlighting Netflix's large untapped market with less than 45% penetration of 800 million addressable households and only 5% of global TV viewing.
- Co-CEO Ted Sarandos noted potential cost savings from AI in content production, with Netflix expecting to spend up to $20 billion on content this year, while analysts see strong ad revenue growth and subscriber retention supporting the company’s outlook.
