“Sure, there was some recent chatter about whether Netflix would consider competing for Warner Bros. Discovery, which is being pursued by David Ellison’s Paramount. But during its October 21 earnings results, the streamer is likely to keep the spotlight on Kpop Demon Hunters, the Sony animated film that has become the service’s most successful”, — write: www.hollywoodreporter.com
With Netflix stepping up to the third-quarter earnings plate after the market close on Tuesday, Kpop characters Rumi, Mira and Zoey are expected to be MVPs. But investors will also already focus on how a strong content slate will play out in the current final quarter of 2025. That may explain why the stock has trended lower over the past week.
But the stocks have been underperforming for a while amid questions about how AI could impact the streamer. “Shares have lagged the Nasdaq … since the end of June, with concerns over engagement growth and the competitive threat from AI-generated content weighing on sentiment,” Morgan Stanley analyst Benjamin Swinburne wrote on Friday. “We remain bullish, expecting strong second-half 2025 financial results, including potential advertising upside and engagement growth.” He reiterated his “overweight” rating with a $1,500 stock price target.
Wolfe Research analyst Peter Supino similarly said: “Amid concerns of AI’s possible impact on streaming economics and after a very sharp third-quarter [stock] underperformance, we are buyers of Netflix.” He stuck to his “outperform” rating and $1,390 stock price target on the company.
“Since May, the story has encountered Google’s Veo 3, Meta’s Vibes, Midjourney’s AI video generator, and OpenAI’s Sora 2,” the analyst wrote in his report entitled “Hey ChatGPT, Should I Buy NFLX?,” which is Netflix’s stock ticker symbol. “While limited to short-form video now, AI’s dramatic strides in video fuel concerns that AI video creation will degrade the value of streaming leadership.”
His conclusion: “Netflix’s widening growth strategies, superior scale, and rich cash flow position it to extend its lead in long-form video streaming, which continues to take wallet share from pay-TV.”
Investors and experts will also listen out for management commentary on the progress of its advertising tier business and newer initiatives, such as this week’s news that Spotify video podcasts will come to Netflix in the US in early 2026, followed by other markets. Initial Spotify Studios and The Ringer titles set to hit Netflix include The Bill Simmons Podcast, The Zach Lowe Show, The McShay Show, The Rewatchablesand Conspiracy Theories.
Bernstein analyst Laurent Yoonwho has an “outperform” rating and $1,390 stock price target on the streamer, is bullish heading into the latest results. “Netflix engagement rebounded in the third quarter, driven almost entirely by KPop Demon Hunters,” he wrote in his earnings preview. “Netflix’s global engagement rose modestly quarter-over-quarter, reversing the second-quarter dip that came with a weaker content slate last quarter.”
The expert highlighted that KPop Demon Hunters added “roughly 500 million viewing hours, with another about 400 million expected in the fourth quarter.” His conclusion: “There are always big hits that meaningfully move the engagement needle, although one of this magnitude is atypical for Netflix, or any player.”
Yoon expects all that to add up to around 7 million Netflix subscribers net adds for the third quarter. “Growth was strong in international regions, primarily in Latin America,” he wrote. “Non-English content continues to be the driving force behind growth, and younger audience segments lead the growth this quarter.”
Bank of America analyst Jessica Reif Ehrlich seemed to refer to the KPop Demon Hunters success in her Netflix earnings preview, entitled “Hunting down hits.” She has a “buy” rating and $1,490 price objective on the stock.
“We anticipate that Netflix’s third-quarter results will be at least in line with guidance on key metrics including revenue, operating income and earnings per share,” she noted. “Netflix continued to execute on its high-profile live event’s strategy, with Canelo-Crawford bringing in an estimated total of 41.4 million viewers, making it the most-viewed men’s championship boxing match of the century. In August, KPopDemon Hunters became the most watched Netflix film of all time (325 million views), indicating the company’s continued ability to scale massive hits out of relatively unknown IP.”
Remember the recent engagement gains? Guggenheim analyst Michael Morris used those for a pun in a recent report, entitling it “Congratulations on Your Engagement.” “Investor conversations remain focused on Netflix viewership engagement trends and implications for longer-term revenue growth and margin expansion,” he wrote. “We expect member engagement to accelerate into year-end, benefiting from a fourth-quarter slate highlighted by the final season of Stranger ThingsJake Paul vs. Tank Davis, and the NFL on Christmas Day.”
His bullish stance meant he stuck to his “buy” rating and $1,450 stock price target.
UBS analyst John Hodulik also maintained his “buy” rating on Netflix shares with a $1,495 price target, highlighting a strong content slate.
“We expect member growth (management cited strong end to the second quarter), higher pricing and increased ad revenues to support 17 percent revenue and 25 percent operating income growth in the third quarter, in-line with guidance, versus 16 percent/45 percent last quarter,” he wrote. “We believe the return of marquee shows (Squid Game June 27th; Wednesday August 6th) and new hits (KPop Demon Hunters, Untamed) provided a tailwind to engagement/monetization.”
And he expects this trend to continue in the current fourth quarter, “with Monster, The Witcher, Stranger Things and NFL content all on the slate.”
BMO Equity Research analyst Brian Pitz is also bullish. In a report entitled “Keeping Eyeballs Locked on Screen With Content Slate, Podcasting, and Gaming,” he maintained his “outperform” rating with a $1,425 stock price target.
“We continue to be bullish on the name given record-breaking KPop Demon Hunters viewership data, an attractive content slate in the second half of 2025, and a strong slate lineup in 2026,” he wrote. “We expect incremental growth in 2026, driven by a strong content lineup, the Spotify podcasting deal, push further into gaming, and AVOD ramp-up.”
Benchmark analyst Daniel Kurnoswho has a “hold” rating without a price target, argued in his preview report that, for most on Wall Street and beyond, “the real question and focus will be on fourth-quarter guidance” on Tuesday. He forecasts a gain of 5.8 million subscribers, “which would put Netflix comfortably in the north of 320 million global paying subs.”
As is quite often the case with the streamer, things could turn out better than projected. “If, as we suspect, there was in the second quarter, there was upside to that number, that would be the most likely driver of revenue outperformance,” Kurnos highlighted.
If his forecasts prove accurate, “AVOD would become an estimated one-third of all global paid users in the third quarter – an intriguing milestone,” Kurnos concluded.
Now, how about that chatter about a possible WBD bid? Kurnos remains cautious on Netflix’s stock because of its high price and bid uncertainty. “We are going to opt to maintain the hold rating for now, with shares trading at almost 33 times 2026 estimated adjusted operating income, and, although a seemingly low probability, the lurking specter of Netflix taking a swing on the M&A front, creating some longer-tailed doubt in investor minds,” he wrote.
Of course, Netflix co-CEO Greg Peters recently responded to a question about a possible WBD play that media deals “don’t have an amazing track record.”
And Yoon wrote: “We have considered the scenario, but not as a likely outcome, largely because it is unclear what strategic value Netflix would realize.”