A shake-up before the numbers
Netflix will release its latest quarterly results and hold an investor call after the stock market closes Tuesday, according to Deadline. The report follows a run of executive changes and the company's deepest round of layoffs since 2022.
The roughly 1,000 job cuts, about 6% of staff, reached the top of the organization chart. Film chief Dan Lin was ousted Monday, after his lieutenant Doug Belgrad and content chief Bela Bajaria, a 10-year company veteran, had already left. Former Disney and Fox executive Peter Rice replaced Bajaria and is now chief content officer.
Seaport Research Partners analyst David Joyce said co-CEOs Ted Sarandos and Greg Peters are "structuring the narrative for the earnings call and beyond."
What Wall Street expects
Analysts are projecting revenue of $12.8 billion for the three months ended September 30, up 11.8% from a year earlier. They expect earnings of 82 cents per share, compared with 59 cents a year ago.
Deadline reports that those figures may count for less than what Sarandos and Peters say. Sarandos was candid at a recent Bloomberg conference, acknowledging that viewership was not growing as much as he would like. Investors have also noted that summer did not bring the usual seasonal rebound in engagement.
Citizens analyst Matthew Condon wrote that record-breaking FIFA World Cup telecasts took a share of overall viewing. Even so, he said, "fewer Netflix titles are capturing the highest levels of streaming engagement" as competition for attention intensifies.
Netflix shares are down 25% this year and more than 40% over the past 12 months, according to Deadline. The report attributes part of the slump to questions raised by the company's pursuit of Warner Bros.
Analysts split on the stock, agree on the stakes
Joyce rates the stock a "buy" because shares are so low, but he cut his price target to $90 from $102. He described the stock as in "somewhat of a 'show-me', wait-and-see period." He said investors need "some indications toward confidence in the growth trajectory" the platform should be able to deliver.
TD Cowen's John Blackledge also rates the stock a "buy," with a $100 price target. He expects "solid 3Q26 results" and believes Netflix can sustain its intermediate-term financial goals, including top-line growth, margin expansion and rising free cash flow.
Condon has a "market perform" rating, which is essentially a hold. He said he is waiting for "a more definitive set of catalysts." He added that the layoffs suggest the company is realigning spending behind its highest-priority initiatives.
Possible growth levers
Analysts point to several options. Sports is one: Netflix closed its 2026 upfront in August with advertising commitments nearly doubling, helped by demand for live events including the NFL, WWE, MLB and the 2027 Women's World Cup. It also recently acquired Spanish and Andorran rights to all 104 matches of the 2030 men's FIFA World Cup.
Advertising is another. Joyce noted that streaming price hikes are nudging more viewers toward cheaper ad tiers, and Netflix has forecast $3 billion in ad revenue this year. Condon said third-party partnerships, such as with Peacock or Fox One, could bring premium live sports to the platform without large upfront rights costs. Sarandos has cited Netflix's TF1 partnership in France as a promising model.
Theatrical releases are a third. Netflix opened the Spanish film La Bola Negra in limited release this past weekend with a 45-day window and official box office reporting. Condon said management has been wary of calling this a strategy shift and appears to be weighing each film individually.
The M&A question
Deadline reports that acquisitions are now on the table after the Warner Bros. pursuit upended Netflix's long aversion to major deals. Joyce said that, pro forma for the Skydance and pending Fox-Roku mergers, Netflix ranks sixth in U.S. TV usage.
Buying NBCUniversal, which will be spun out from Comcast next year, could lift Netflix's share of TV usage from 7.8% to 14.9%, according to Joyce. He said Rice's experience combining content operations at 20th Century Fox and Disney could be useful in such a deal.
