Netflix's blockbuster run loses spark amid valuation jitters

Core Insights - Netflix's shares dropped 7% in premarket trading due to a disappointing fourth-quarter revenue outlook despite a strong content lineup, including the final season of "Stranger Things" [1] - The company missed third-quarter profit estimates because of unexpected expenses related to a dispute with Brazilian tax authorities, amounting to approximately $619 million [2] Financial Performance - Netflix's third-quarter revenue was $11.5 billion, aligning with forecasts, while the fourth-quarter forecast is $11.96 billion, slightly above Wall Street's expectation of $11.90 billion [3] - The company recorded its best ad sales quarter in history during the July-September period, although specific numbers were not disclosed [4] Market Position - Netflix's stock has increased by 40% this year, outperforming its media peers and the S&P 500, with a forward price-to-earnings multiple of 39.59, significantly higher than the average of the FAANG group [5] - Analysts note that the lack of disclosed subscriber numbers makes it challenging to predict Netflix's financial performance, leading to speculation about potential weaknesses [4][5]