Netflix shares drop as revenue forecast leaves investors unimpressed
The stock has nearly doubled in value in the last 12 months, pushing Netflix's market value above $540 billion, more than the combined worth of Disney, Comcast, and Warner Bros. Discovery.
The streaming platform on Thursday raised its 2025 revenue outlook and expects to be in the range of $44.8 billion to $45.2 billion, broadly helped by a weaker dollar, compared to its previous forecast range of $43.5 billion to $44.5 billion.
"Better-than-expected quarterly results and upgraded full-year revenue and cash flow guidance weren't enough to keep investors happy," said Dan Coatsworth, investment analyst at AJ Bell.
Investors were disappointed because the improved revenue outlook was driven by foreign exchange factors rather than stronger customer demand, Coatsworth said.
Disappointment over the forecast overshadowed a quarterly profit beat that was fueled by the success of the final season of 'Squid Game'.
Netflix shares, which have gained about 43% so far this year, currently trade at 43.8 times the estimates of its earnings for the next 12 months, compared with Disney's 19.57 and Comcast's 7.71.
"The muted response to Netflix's share price... may be down to its lofty valuation," said Kathleen Brooks, research director at XTB.
With subscriber growth slowing after the pandemic-era surge, Netflix has shifted its focus to ramping up advertising revenue to reshape its business model.
The company is expanding its ad-supported tiers, implementing targeted ad placements, and working on live sports events to attract advertisers.
"As Netflix ramps up its advertising revenues combined with underlying strength in the core business, we see a strong runway to drive higher monetization of its engagement," analysts at MoffettNathanson said. At least 16 analysts raised their price targets on the stock following results, bringing the median target to $1,365, as per data complied by LSEG.
(Reporting by Joel Jose and Siddarth S in Bengaluru; Editing by Leroy Leo)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Crypto Insight
3 hours ago
- Crypto Insight
Charles Schwab plans to launch Bitcoin, Ether spot trading, CEO says
Charles Schwab is preparing to expand its crypto offerings by launching spot trading for Bitcoin and Ethereum, according to CEO Rick Wurster. In an interview with CNBC on Friday, Wurster said Schwab clients already hold significant exposure to crypto via exchange-traded products (ETPs), owning more than 20% of the industry's crypto ETP market. However, he noted that crypto still represents a relatively small portion of clients' total wealth, around $25 billion out of $10.8 trillion. 'We anticipate launching Bitcoin and Ether sometime soon so that our clients have access to that,' he said. 'We think that will be an acceleration of our growth.' The CEO claimed that many clients currently keep 98% of their wealth with Schwab but hold just 1% to 2% of their crypto assets with digital-native firms. 'They really want to bring it back to Schwab because they trust us. They want us to sit alongside their other assets,' he added. Schwab to compete against Coinbase Wurster said that Schwab is 'absolutely' looking to compete against crypto exchanges like Coinbase by introducing spot crypto trading. 'If they're buying their crypto at Coinbase, we would love to see them bring their crypto back to Schwab,' he said. Earlier this year, Wurster said the company expects an April 2026 launch window to provide spot Bitcoin trading services to Schwab clients. At the time, he cited a 400% increase in traffic to Schwab's crypto website as evidence of investor interest in digital assets. Schwab has increased its involvement in the crypto sector amid growing regulatory clarity. In 2025, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve rescinded earlier restrictive guidelines issued after the FTX collapse. The change allows banks to participate in crypto activities such as custody and trading. Following approval from the US Securities and Exchange Commission, Schwab added Bitcoin and Ether ETFs to its platform. The company also provides other crypto-related products, including mixed ETFs, mutual funds, and Bitcoin options, according to its website. Institutions ramp up crypto investments A survey conducted in March by Coinbase and EY-Parthenon found that 83% of institutional investors intend to increase their crypto holdings in 2025, with many already investing in altcoins beyond Bitcoin and Ether. The survey identified XRP and Solana as the most favored assets among respondents. It also showed that most expect to allocate 5% or more of their portfolios to cryptocurrencies this year. Similarly, a May report by Fireblocks found that 90% of institutional players are using or exploring stablecoins, with almost half already deploying them for payments. Source:
The National
5 hours ago
- The National
Egyptian-American economist vying to be next Chancellor of Cambridge
Dr Mohamed El-Erian describes the University of Cambridge as his 'happy place'. The Egyptian-American economist, known to millions as a globe-trotting economist who has shaped thinking about historic twists in the world's fortunes, graduated from Queens' College in 1980. After a successful career – working at the International Monetary Fund, as a bond trader, adviser to US President Barack Obama, author and columnist – he returned to his alma mater as president in 2020. He's genuinely one of the kindest people that I've ever met Georgia Box He now hopes to be elected chancellor of the university, an 800-year-old role that has been held by princes and prime ministers. In a ballot of alumni, he is pitted against two lords, a TV presenter, an anti-Brexit campaigner and several academics and business leaders, with the result due to announced by July 23. Dr El-Erian, who was named in the Top 100 Global Thinkers by Foreign Policy magazine and made Worth magazine's list of 100 Most Powerful People in Finance, he has endorsements from former UK prime minister Gordon Brown, Google DeepMind co-founder Demis Hassabis and businesswoman Arianna Huffington. He was born in New York to Egyptian parents, and his father worked as an ambassador, judge and at the United Nations. He grew up in the US and Egypt, as well as being educated at boarding school in England. He won the economics category of the Great Arab Minds awards in 2023. He has run a vigourous social media campaign, mixing his serious message about the transformation he believes is needed at Cambridge with light-hearted interviews gently ribbing rival university Oxford. Dr El-Erian has been seen wearing a Queens football shirt and also gave a tour of his home office which features a giant poster of Cambridge. 'I am happiest here, just ask my daughters,' he says in that video. He sets out his proposals for how the chancellor's role should change: making it less ceremonial and more practical, ensuring the university is on a sound financial footing and open to the international community. As co-chairman of the Cambridge Capital Campaign he has helped bring in £2.2 billion of investment to Queens. 'Cambridge must redouble its efforts to attract funding and donations,' he said in his campaign statement. 'I've seen first-hand how innovation and philanthropy help to support vital research, expand opportunities, and better secure our future. 'If elected chancellor, I'll intensify these efforts by helping to tap into global philanthropic opportunities and to attract the investment Cambridge needs.' He has also spoken about the need to understand how Cambridge can give students a foundation for life. 'Throughout my time here it's been about identifying what the problem is and fix[ing] it,' he said in a video discussing the need for flexible scholarships. In footage filmed on the grassy bank of the River Cam as punts glide past, Georgia Box, an associate at Deutsche Bank, was interviewed about why she was supporting Dr El-Erian. He explained how she was under pressure to start earning, using her new degree, but not continue her studies at a higher level. He helped to design a scholarship that would not just pay for fees and living accommodation, but also 'something extra'. Ms Box said: 'He cares a lot about each and every student. He's genuinely one of the kindest people that I've ever met. I think he's just an excellent leader and I can't think of anyone else that's better for the job.' In her submission to be chancellor, broadcaster Sandi Toksvig points out: 'The first known chancellor of Cambridge was Richard of Wetheringsett who served sometime between 1215 and 1232. After that we have had a plethora of other Richards, many Johns and an awful lot of Stephens. 'After 800 years I wonder if it isn't time for a change,' she asks. Dr El-Erian will be hoping to add the name Mohamed to that list.
Khaleej Times
15 hours ago
- Khaleej Times
Astronomer CEO Andy Byron resigns after Coldplay concert clip goes viral
Astronomer's CEO Andy Byron has resigned, a statement issued by the tech company said. This comes in the wake of Byron's video with the company's HR Chief at the Coldplay concert going viral on social media. The company said on X, "As stated previously, Astronomer is committed to the values and culture that have guided us since our founding. Our leaders are expected to set the standard in both conduct and accountability, and recently, that standard was not met. "Andy Byron has tendered his resignation, and the Board of Directors has accepted. The Board will begin a search for our next Chief Executive as Cofounder and Chief Product Officer Pete DeJoy continues to serve as interim CEO. Before this week, we were known as a pioneer in the DataOps space, helping data teams power everything from modern analytics to production AI. While awareness of our company may have changed overnight, our product and our work for our customers have not. We're continuing to do what we do best: helping our customers with their toughest data and AI problems."
