Still healthy growth in the absolute but losing narrative control: Visibility into next year‘s growth drivers remains limited, with weaker second derivatives likely to dominate the narrative over the coming quarters.

Research evidence excerpt

Still healthy growth in the absolute but losing narrative control: Visibility into next year‘s growth drivers remains limited, with weaker second derivatives likely to dominate the narrative over the coming quarters.

Equity Research

U.S. Media

17 July 2026

Netflix, Inc.

Still healthy growth in the

absolute but losing narrative

NFLX EQUAL WEIGHTcontrol

Unchanged

Visibility into next year's growth drivers remains limited, with U.S. Media NEUTRAL

weaker second derivatives likely to dominate the narrative Unchanged

over the coming quarters. Price Target lowered -6% fromUSDUSD80.0085.00

Price (16-Jul-26) USD 74.35

Netflix results and guide were roughly in line with prior guide and expectations (Figure 1-3) but Potential Upside/Downside +7.6%

given recent engagement concerns, risk/reward in the name is asymmetric as we had Source: Bloomberg, Barclays Research

highlighted earlier this week (please see 2Q26 Media Preview: M&A everywhere, conviction

nowhere, 14 July 2026). As suggested in the referenced report, we think the market was set to Market Cap (USD mn) 313072

punish small second derivative misses by a lot more than it is willing to reward small beats. In Shares Outstanding (mn) 4210.80

that spirit, the company’s lack of guidance increase for the year, guidance of a slight sequential Free Float (%) 99.41

decline in ex FX revenue growth in Q3 and continuing weakness in engagement resulted in a 52 Wk Avg Daily Volume (mn) 41.7

disproportionate post close move in the stock vs what results should have warranted. Dividend Yield (%) N/A

• The company took a price increase in late Q1 which was expected to benefit Q2 and while Return on Equity TTM (%) 48.50

revenue growth did see a tailwind from this, it was a bit less than anticipated (FX neutral) as Current BVPS (USD) 7.39