Netflix Stock Selloff A 'Buying Opportunity': Analysts See Continued Outperformance

Core Viewpoint - Analysts believe that Netflix's third-quarter results, which fell short of estimates, do not raise significant concerns, emphasizing the company's advertising growth as a crucial factor for future success [1][4]. Analyst Ratings and Price Targets - Wedbush analyst Alicia Reese reiterated an Outperform rating, lowering the price target from $1,500 to $1,400 [1]. - JPMorgan analyst Doug Anmuth maintained a Neutral rating, reducing the price target from $1,300 to $1,275 [2]. - Goldman Sachs analyst Eric Sheridan kept a Neutral rating with a price target of $1,300 [2]. - Bank of America Securities analyst Jessica Reif Ehrlich reiterated a Buy rating with a price target of $1,490 [2]. - Morgan Stanley analyst Benjamin Swinburne maintained an Overweight rating with a price target of $1,500 [2]. - Guggenheim analyst Michael Morris maintained a Buy rating with a price target of $1,450 [2]. - Canaccord Genuity analyst Maria Ripps maintained a Buy rating with a price target of $1,525 [3]. Financial Performance and Future Outlook - Netflix's third-quarter results and fourth-quarter guidance were described as underwhelming, but analysts noted a compelling growth story [4]. - Analysts highlighted that Netflix is positioning for substantial growth in global advertising, which is expected to become the primary revenue driver by 2026 [5]. - JPMorgan noted that while the third-quarter results were solid, they lacked the upside seen in previous quarters, with ad revenue tracking ahead of expectations [6]. - Goldman Sachs pointed out the lack of detailed guidance for 2026 as a potential negative, but expects rising engagement and revenue growth [7]. - Bank of America noted that the absence of 2026 guidance likely does not indicate a change in underlying fundamentals [8]. - Analysts expect advertising revenue to more than double in 2025, with engagement growth and a constructive pricing backdrop [9]. Engagement and Content Strategy - Analysts observed that Netflix's engagement trends are improving, with a strong content slate contributing to record engagement in Q3 [10][11]. - Canaccord highlighted Netflix's record engagement and advertising growth as key factors in the quarterly results [11]. - Analysts believe Netflix's focus on organic growth will continue to yield membership growth, pricing growth, and increased advertising revenue [11]. Stock Performance - Netflix shares fell 10.1% to $1,115.69, with a year-to-date increase of 25.8% in 2025 [12].