Veteran analyst takes surprising move on Netflix stock after earnings

Core Insights - Netflix's stock experienced a significant decline of approximately 10% following its Q3 earnings report, which revealed strong revenue growth but a notable earnings miss due to a $620 million tax charge in Brazil [1][2]. Financial Performance - For Q3 2025, Netflix reported revenue of $11.5 billion, reflecting a year-over-year increase of about 17%. However, net income was reported at $5.87 per share, falling short of analyst expectations of $6.96 per share [2]. - The company provided guidance for Q4, projecting revenue of around $11.96 billion and earnings per share of approximately $5.45, both slightly above Wall Street's forecasts [2]. Analyst Reactions - Following the earnings report, analysts have adjusted their price targets for Netflix. Wedbush lowered its target to $1,400 from $1,500 while maintaining an outperform rating, citing underwhelming Q3 results and Q4 guidance but still anticipating substantial growth in advertising [3]. - JPMorgan reduced its price target to $1,275 from $1,300, keeping a neutral rating, and emphasized that the Brazil tax expense is a temporary issue, with a greater concern being the lack of revenue growth in the latter half of the year [4]. - Argus reiterated a buy rating with a price target of $1,410, asserting that Netflix's value proposition remains strong compared to other entertainment options [5]. Market Sentiment - Some market participants view the recent decline as a buying opportunity. Veteran trader Stephen Guilfoyle expressed confidence in Netflix's growth, cash flows, and balance sheet, indicating that the post-earnings slump presents a favorable entry point [6]. - Technically, Guilfoyle noted a bullish falling wedge pattern in Netflix's stock, suggesting potential for a breakout despite the recent drop [7].