Netflix stock has had a rough week. NFLX dropped roughly 13% over five trading sessions after the company’s Q1 2026 earnings report left investors cold — not because of what happened, but what’s coming.
Q1 revenue and EBIT came in about 1% above Piper Sandler estimates. But Q2 guidance was the problem. Revenue guidance came in 0.5% below consensus, and operating income guidance missed by 5%. That’s the kind of gap that sends a stock sliding.
On top of that, Reed Hastings — Netflix co-founder and current board chairman — will step down when his term ends in June. The news landed at the same time as the earnings release and added to the pressure.
Wolfe Research analyst Peter Supino didn’t flinch. He reiterated a Buy rating and kept his $107 price target in place, pointing to what he calls solid core engagement trends.
Supino addressed the common concern that Netflix is losing viewers to YouTube, Meta, and TikTok head-on. His data suggest Netflix’s engagement is holding up. He describes it as a “highly differentiated product” whose value isn’t just about raw watch time.
He also noted that the average U.S. Netflix subscriber already spends 1.6 hours per day — about one-third of their daily video time — on the platform. That’s a strong base to work from.
Supino believes Netflix can keep raising prices as long as it stays a daily habit for subscribers. He sees room for sustained mid-single-digit subscriber growth if connected TV households keep growing at 70 to 100 million per year and Netflix holds its ~30% penetration of those homes.
Non-English content accounted for 68% of total engagement in 2025, down from 70-71% in 2023-2024. That 2-3 percentage point shift equals roughly 4 to 6 billion viewing hours moving toward English-language programming.
International engagement per subscriber fell high single digits in 2025, compared to low single-digit declines in the U.S. Wolfe links part of this to Netflix’s expansion into markets like Japan, where average TV viewing is about 50% lower than in the U.S.
It’s a real headwind, but Supino frames it as a math issue, not a product issue. Netflix is simply adding more subscribers in lower-consumption markets.
The stock currently trades around $92.58. With a PEG ratio of 0.64, InvestingPro flagged it as undervalued relative to near-term earnings growth. Revenue growth over the last twelve months sits at 16.7%.
Other analysts have adjusted targets post-earnings. Piper Sandler raised its target to $115 from $103. KeyBanc held at $115. Bernstein trimmed from $115 to $110. Guggenheim cut from $130 to $120. TD Cowen held at $112. All maintained positive ratings.
Wall Street’s current consensus: 29 Buys, 8 Holds, average price target of $114.96 — implying about 24% upside from current levels.
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