Netflix Has Another Tough Month, Dropping 10%: This Wall Street Pro Says 90% Gains Lie Ahead
Netflix slashed its ad revenue outlook, shed 30% this year, and watched competitors gain while it fell, yet one Wall Street analyst still sees a near-doubling from here. What would have to go right to make that call pay off?
Netflix (NASDAQ:NFLX | NFLX Price Prediction) trades at $65.04. Wall Street’s average price target is $90.75, which implies 39.5% upside.
Netflix runs a global paid streaming service. Its global audience is approaching 1 billion, and it has a pending all-cash acquisition of Warner Bros. Discovery (NASDAQ:WBD) at $27.75 per share. Wall Street wants to know whether ads, pricing and live events can keep revenue growing at double digits while the deal adds debt. The most bullish analyst on the stock is BMO Capital Markets’ Brian Pitz, whose $125.00 target stands 92% above the current price.
Ad Revenue Cut Overshadows an Earnings Beat
Advertising did the most damage. The stock cut its 2026 ad revenue outlook to about $2.70 billion from roughly $3.00 billion because new ad products are rolling out more slowly than planned. The stock fell 5.31% in the latest session and 11.34% over the past month. It is down 30.63% this year, a drop of more than 30% that leaves it near its 52-week low of $64.10.
The quarter itself was solid. Revenue rose 11.8% to $12.87 billion, slightly missing expectations. GAAP EPS of $0.87 beat the $0.82 estimate. The guidance disappointed: Netflix expects a fourth-quarter operating margin of 26.0%, down from 34.6% in the third quarter, partly because of costs tied to roughly 1,000 job cuts. It also lowered its 2026 free cash flow forecast to about $12.0 billion from $12.5 billion.
The selling hit Netflix alone. The S&P 500 was essentially flat over the same month, at -0.04%.
51 Analysts Still Back Ads, Pricing and Buybacks
Of the 51 analysts covering the stock, 7 rate it Strong Buy, 28 rate it Buy, 15 say Hold and 1 says Sell. Their earnings forecasts have barely changed. The average 2027 EPS estimate is 3.8087, compared with 3.8291 90 days ago. Targets have come down, though. BMO cut its target to $125.00 from $135.00, and UBS’s John Hodulik is near $100.00.
BMO’s case rests on three things: ads supported by live events, pricing power, and free cash flow that pays for buybacks. Management made a similar case. The ad business is “still growing over 80% this year,” Netflix plans ad tiers in 15 new countries in 2027, and price increases have “gone well.” Netflix bought back $4.8 billion of stock in the quarter and has $22.3 billion of authorization left.
The next checkpoint comes in January, when Netflix gives its 2027 guidance. At a forward P/E of about 19x, the stock already prices in some doubt. Price targets are opinions, and several of them are falling.
Disney and Spotify Held Up While Netflix Fell
Netflix fell alone. Disney (NYSE:DIS) rose 7.29% over the past month to $111.82. Its average target of $126.58 implies 13.2% upside. Analysts are firmly bullish, with 6 Strong Buy, 23 Buy, 3 Hold and 1 Sell. Their targets point to far less upside than Netflix’s.
Spotify (NYSE:SPOT) gained 1.66% over the month to $524.80. Its target of $600.53 implies 14.4% upside. Analyst ratings break down as 8 Strong Buy, 24 Buy, 7 Hold and zero Sell.
Netflix has by far the largest gap to its target in the group. Its competitors are mostly priced near where analysts think they belong. Netflix is the one with a big gap between the market and Wall Street.
A 30% Slide While the S&P 500 Gained 13%
Netflix is down 30.63% this year. The S&P 500 is up 13.38%. Over the past year, Netflix lost 47.61% while the index gained 15.18%.
At $65.04, the stock is below its 50-day average of $74.85 and its 200-day average of $82.65. The 51 analysts covering it set an average target of $90.75, or 39.5% upside.
Netflix Looks Cheap If Ads Catch Up in 2027
Things could improve if the ad tier launches in the new countries on schedule, January’s 2027 guidance supports double-digit revenue growth, and buybacks continue alongside the Warner Bros. deal. If that happens, a stock trading at about 19x forward earnings could move back toward the low $90s.
The stock could prove a value trap if U.S. viewing keeps sliding, ad delays carry into 2027, and the Warner Bros. debt pressures buybacks. Management admitted U.S. execution needs work. The CEO said: “We do need better execution in the U.S.”
The outlook is balanced. Earnings estimates have held steady, and the price drop has made the valuation more reasonable. Still, a 92% gain needs everything to go right, and the consensus target is the more realistic marker to keep an eye on.
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Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
