Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeNewsRetail & MarketingNetflix faces earnings risk after stock’s US$257 billion wipeoutThe company is struggling to get viewers to stick with its shows for more than a seasonAuthor of the article: You can save this article by registering for free here. Or sign-in if you have an account.Improved engagement is particularly crucial to investors because it indicates that more people are subscribing and watching Netflix programs. Photo by Mario Tama/Getty ImagesNetflix Inc. has been one of the worst stocks in the market over the past 12 months as concerns about the video-streaming giant’s plans and prospects refuse to go away. Now, investors worry that its earnings report after the close will confirm those fears.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe shares have lost about 45 per cent since hitting an all-time high on June 30, 2025, putting them among the 20 worst performers in the S&P 500 Index over that time and wiping out US$257 billion in market value. They’ve slumped 31 per cent since mid-April, when Netflix’s previous earnings report included a weak forecast and the news that Chairman Reed Hastings, the company’s co-founder and public face, was stepping down. This was just a few months after Netflix withdrew from the bidding to buy Warner Bros Discovery Inc., which ultimately inked a deal with Paramount Skydance Corp.Shares were down 0.3 per cent on Thursday.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againConcerns about the company’s audience engagement and threats of competition have only been building since then. Last month, Meta Platforms Inc. announced that it’s exploring new formats for its Instagram for TV platform, suggesting more competition in the streaming arena. Meanwhile, movie theatres have experienced something of a revival, with audiences flocking to unexpected hits like Backrooms and Obsessions. Perhaps not surprisingly, Netflix is being trounced by stocks like Cinemark Holdings, Inc., Imax Corp. and AMC Entertainment Holdings Inc. this year.All of which explains why these results represent something of an existential moment for Netflix shareholders. And it doesn’t help that the stock has fallen after each of its last four earnings reports.“Right now, the idea of disruption is in the ether,” said Conrad Van Tienhoven, portfolio manager at Riverpark Capital, which holds Netflix shares. “We’ve had third-party data showing lower engagement, we have Netflix no longer giving subscriber numbers, and we have it looking at M&A for the first time. All of that makes up a trail of breadcrumbs that has led to the stock being where it is now. I hope the company realizes how important this call will be to change the view, especially since Reed Hastings is no longer around.”Improved engagement is particularly crucial to investors because it indicates that more people are subscribing and watching Netflix programs. The company is struggling to get viewers to stick with its shows for more than a season, and it reportedly discussed adding live channels and bundling other subscription-based streaming services to gain better traction.“Trying to understand what they’re going to do to improve engagement moving forward is going be key,” said Hanna Howard, a portfolio manager at Gabelli Funds, adding that a strong outlook would be better for lifting shares than solid quarterly results. “I think that some people are viewing their attempt at Warner Brothers as kind of a way to combat the engagement concerns and obviously that didn’t pan out.”There have been indications that Netflix may be interested in other acquisitions. Last month, it lost out to Fox in its pursuit of Roku, according to a report by Semafor. And it supposedly was among the companies interested in buying Lionsgate, according to the same report, although Netflix denied it was considering a bid.The research firm M Science warned about weak user trends in June, with data suggesting the company was seeing its weakest quarterly global net additions since 2022. “Churn has picked up in the United States and appears worse than what we saw during the 2025 price hike,” it wrote.In terms of the results themselves, Netflix is expected to post a 14 per cent increase in second-quarter revenue to roughly US$13 billion, and a 10 per cent rise in earnings per share to 79 cents. Wall Street is overwhelmingly bullish on the company, with 51 of the 64 analysts tracked by Bloomberg who follow the stock rating it a buy. Its price target of US$112.51 implies a 52 per cent gain over the next 12 months.“I think the results will show that the business remains healthy, that advertising continues to grow, that consumers continue to absorb price hikes,” Riverpark Capital’s Van Tienhoven said. “It remains a must-own, must-pay-for service for hundreds of millions. The selloff has been overblown. It is still the greatest media asset in the world. No one is close in streaming. It is trading at a discount while still growing double-digits. It seems like a great time to buy.” Netflix Inc. is scheduled to release earnings figures on July 16. Photo by Gabby Jones/BloombergIndeed, the shares are relatively cheap. Netflix currently trades at 20 times earnings projected over the next 12 months, compared with its 10-year average of 51. The stock was priced above 30 times forward earnings as recently as April, and it’s now at a slight discount to the S&P 500 for the first time since 2022.All of which makes Netflix shares a potential compelling opportunity for investors. That is, as long as the company’s earnings don’t confirm that its 12-month slide was justified.“Every time the stock’s been down, it always comes back,” said Ross Gerber of Gerber Kawasaki, which owns Netflix shares, adding that he’s a fan of the company’s leadership and especially chief executive Ted Sarandos. “For an investor looking at Netflix, at 20 times earnings, it’s just a ridiculous gift.”—With assistance from Subrat Patnaik and David Watkins. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.