Why Netflix Stock Is Plunging in After-Hours Trading

Core Viewpoint - Netflix's stock has declined following the announcement of its fourth-quarter 2025 financial results and the decision to pause its share buyback program, which has disappointed investors [1][3]. Financial Performance - Netflix reported Q4 2025 revenue of $12.05 billion, exceeding analyst expectations of $11.97 billion [5]. - The company achieved Q4 2025 earnings per share (EPS) of $0.56, slightly above the anticipated $0.55 [5]. - Management projects 2026 revenue to be between $50.7 billion and $51.7 billion, indicating a year-over-year growth of 12% to 14% [5]. Strategic Decisions - Netflix has decided to put its share buyback program on hold to strengthen its cash position during the acquisition of Warner Bros. Discovery [3]. - The acquisition agreement with Warner Bros. Discovery has been amended to an all-cash transaction valued at $27.75 per share, differing from the original mix of cash and stock [4]. Market Position - Despite the pause in the share buyback program, Netflix's stock is currently trading at 39 times operating cash flow, which is a discount compared to its five-year average cash flow multiple of 59.2 [6]. - Analysts suggest that the current market conditions may present a favorable opportunity for investors to consider buying Netflix stock [6].