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Netflix's Q4 earnings report revealed mixed results, with an EPS of $0.56 slightly exceeding the $0.55 consensus estimate and revenue of $12.05 billion surpassing the expected $11.97 billion. However, Q1 2026 guidance of $0.76 EPS and $12.16 billion in revenue fell short of market expectations, leading to a 3% decline in stock price. For 2026, Netflix forecasts $51 billion in revenue, a 14% year-on-year increase, driven by membership growth, pricing adjustments, and a projected $3 billion in advertising revenue. The integration of Warner Bros. Discovery (WBD), described as a "strategic accelerant," is expected to complement Netflix's core offerings, which will account for 85% of its revenues. Netflix is expanding into live events, video podcasts, and cloud gaming to enhance engagement, with over 200 live events already hosted. Despite these initiatives, analysts remain cautious, citing concerns over competition, guidance, and risks tied to the WBD acquisition. Price targets have been lowered, with Pivotal Research and Goldman Sachs reducing targets to $95 and $100, respectively. Nonetheless, Netflix's advertising business shows promise, with 190 million monthly active ad viewers and projected ad revenue growth of 46% to $4.3 billion by 2026. The company maintains a strong market position with a 17.16% revenue growth rate and a 22.13% net margin, reflecting its focus on innovation and long-term growth.
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Ways to trade options* on NFLX

Bearish Option Strategy: Long Puts

Traders buy a single put option on a stock or ETF. This strategy can benefit from a price drop while risking more capital than a spread.

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