$NFLX: Mixed Earnings, Slower Growth, Bigger Questions:
* $NFLX dropped around 8% after a disappointing quarter.
* Management said engagement remains healthy but stopped reporting engagement metrics, reducing transparency much like when subscriber numbers were removed.
* EPS beat estimates by just $0.01, while revenue missed expectations.
* The company also missed Wall Street’s Q3 and FY2026 forecasts for revenue growth, operating margins, operating income, and free cash flow.
* Free cash flow missed estimates by roughly $600 million, raising concerns about capital efficiency.
* Growth slowed compared with Q2 2025, while operating margins declined, suggesting higher spending is producing slower year-over-year growth.
* The recent selloff has made the valuation more attractive, but Netflix still trades at a similar premium to $META and $MSFT, despite those companies delivering stronger growth.
* Netflix remains a high-quality blue-chip company, but investors will be watching closely to see whether institutional buyers step in to support the stock after the pullback.
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