2 Reasons to Hit Pause on Netflix Stock Now

Core Insights - Netflix's stock performed exceptionally well in 2024, driven by strong content, subscriber growth, and an advertising push, which enhanced its competitive position in the streaming market [1] - In 2025, Netflix's operating momentum remains solid, with continued viewer engagement and growth in the ad-supported tier, but its stock has underperformed compared to the broader market [2] - The recent announcement of Netflix's acquisition of Warner Bros introduces regulatory risks and execution challenges, adding uncertainty to its future [3] Financial Performance - Netflix's stock is up 8% in 2025, lagging behind the S&P 500 Index's nearly 16.7% increase, indicating that while growth is maintained, the acceleration rate is insufficient to boost share price [2] - The company reported total debt of approximately $14.5 billion at the end of Q3, and the acquisition of Warner Bros. Discovery is expected to increase leverage, potentially impacting future earnings [7] Acquisition Details - The acquisition of Warner Bros. is valued at around $82.7 billion and aims to enhance Netflix's content library and global competitive edge [4] - The deal requires Warner Bros. Discovery to spin off its Global Networks division into a new publicly traded company, delaying completion until Q3 2026 [5] - Regulatory scrutiny is anticipated, with concerns about monopoly and industry consolidation potentially delaying approval or jeopardizing the deal [6]