{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "NFLX",
  "name": "Netflix, Inc.",
  "url": "https://frontierpicks.com/dossiers/NFLX/",
  "json_url": "https://frontierpicks.com/dossiers/NFLX.json",
  "status": "WATCHLIST",
  "current_conviction": "LOW",
  "archetype": {
    "code": "a7",
    "n": 7
  },
  "current_thesis": "Netflix's shares are more likely to lag the S&P 500 than lead it while members use the service less and its 2026 ad target sits cut; the fourth-quarter report and 2027 outlook, expected around 20 January 2027, decide whether engagement has turned.",
  "invalidation_trigger": "A daily close above $70, over the 50-day moving average and every November 2026 insider sale price, which would show the shares leading; or fourth-quarter revenue above the $13.4 billion guidance with 2026 ad revenue above about $2.7 billion.",
  "catalyst_date": null,
  "portfolio": null,
  "pick": null,
  "themes": [
    "streaming-media-entertainment"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "Netflix Stock Faces Valuation Reset Despite Strong Cash",
      "url": "https://www.tradingpedia.com/2026/11/11/netflix-stock-faces-valuation-reset-despite-strong-cash/",
      "date": "2026-11-11"
    },
    {
      "title": "News Center >",
      "url": "https://www.nielsen.com/news-center/2026/tv-viewing-cools-off-in-nielsens-august-gauge-reports-as-sports-take-a-breather-and-school-resumes/",
      "date": null
    },
    {
      "title": "tubefilter.com",
      "url": "https://www.tubefilter.com/2026/10/22/nielsen-the-gauge-youtube-record-watch-time-share-us-tv/amp/",
      "date": "2026-10-22"
    },
    {
      "title": "Netflix, Inc. $NFLX Shares Bought by Kimelman & Baird LLC",
      "url": "https://www.marketbeat.com/instant-alerts/filing-netflix-inc-nflx-shares-bought-by-kimelman-baird-llc-2026-11-08/",
      "date": "2026-11-08"
    },
    {
      "title": "PPC Land",
      "url": "https://ppc.land/youtube-gains-record-15-8-of-us-tv-time-in-nielsens-august-gauge/",
      "date": null
    }
  ],
  "evidence": [
    {
      "claim": "Third-quarter 2026 revenue was $12.9 billion, up 12% from a year earlier; operating income $4.5 billion, up 37%, a 34.6% margin; diluted EPS $0.87 against $0.59; free cash flow $2.9 billion.",
      "source": "Netflix third-quarter 2026 shareholder letter (SEC 8-K Exhibit 99.1)",
      "as_of": "2026-10-20"
    },
    {
      "claim": "2026 guidance: revenue $51.1 billion, operating margin 31.5%, free cash flow about $12.0 billion (from $12.5 billion), ad revenue about $2.7 billion (from about $3 billion).",
      "source": "Netflix third-quarter 2026 shareholder letter (SEC 8-K Exhibit 99.1)",
      "as_of": "2026-10-20"
    },
    {
      "claim": "Fourth-quarter 2026 guidance: revenue $13.4 billion, operating margin 26.0% including about 1.2 points of job-cut cost, diluted EPS $0.67, against consensus of $13.52 billion and $0.73.",
      "source": "Netflix third-quarter 2026 shareholder letter",
      "as_of": "2026-10-20"
    },
    {
      "claim": "Nielsen's August 2026 Gauge put Netflix at 7.7% of US TV viewing time, down from 7.8% in July, while YouTube reached a record 15.8%.",
      "source": "Nielsen The Gauge, August 2026 release",
      "as_of": "2026-10-22"
    },
    {
      "claim": "Co-CEO Greg Peters sold 27,312 shares at $63.62 on 2026-11-09, the net shares left after a 2026-11-03 option exercise and tax withholding; co-CEO Ted Sarandos sold 27,312 at $66.20 on 2026-11-04.",
      "source": "SEC Form 4 filings, 2026-11-05 and 2026-11-10",
      "as_of": "2026-11-10"
    },
    {
      "claim": "Netflix repurchased 63.9 million shares for $4.8 billion in the third quarter of 2026, its largest quarter ever, with $22.3 billion of authorization remaining.",
      "source": "Netflix third-quarter 2026 shareholder letter (SEC 8-K Exhibit 99.1)",
      "as_of": "2026-10-20"
    },
    {
      "claim": "MarketBeat consensus is Moderate Buy (2 Strong Buy, 35 Buy, 17 Hold, 2 Sell) with an average price target of $89.14.",
      "source": "MarketBeat",
      "as_of": "2026-11-08"
    },
    {
      "claim": "At the 2026-11-10 close Netflix was valued at 17.3 times forward earnings with a 4.4% free cash flow yield.",
      "source": "Tradingpedia, 2026-11-11",
      "as_of": "2026-11-10"
    }
  ],
  "view_changes": [],
  "frame": null,
  "filed_numbers": {
    "as_of": "2026-11-13",
    "sector": "Communication Services",
    "financials": {
      "status": "ok",
      "reason": null,
      "close_date": "2026-11-13",
      "latest_quarter": "2026-09-30",
      "figures": {
        "revenue": {
          "status": "ok",
          "quarters": [
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              "restated": null,
              "value_musd": 12874.2,
              "yoy_pct": 11.8
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            {
              "end": "2026-06-30",
              "filed": "2026-07-17",
              "restated": null,
              "value_musd": 12559.9,
              "yoy_pct": 13.4
            },
            {
              "end": "2026-03-31",
              "filed": "2026-04-17",
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              "value_musd": 12249.8,
              "yoy_pct": 16.2
            },
            {
              "end": "2025-12-31",
              "filed": "2026-01-23",
              "restated": null,
              "value_musd": 12050.8,
              "yoy_pct": 17.6
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            {
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              "value_musd": 11510.3,
              "yoy_pct": 17.2
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              "filed": "2025-07-18",
              "restated": null,
              "value_musd": 11079.2,
              "yoy_pct": 15.9
            }
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        },
        "gross_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-10-21",
              "restated": null,
              "pct": 52.8
            },
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              "pct": 46.4
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              "filed": "2025-07-18",
              "restated": null,
              "pct": 51.9
            }
          ]
        },
        "operating_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-10-21",
              "restated": null,
              "pct": 34.6
            },
            {
              "end": "2026-06-30",
              "filed": "2026-07-17",
              "restated": null,
              "pct": 33.4
            },
            {
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              "filed": "2026-04-17",
              "restated": null,
              "pct": 32.3
            },
            {
              "end": "2025-12-31",
              "filed": "2026-01-23",
              "restated": null,
              "pct": 24.5
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            {
              "end": "2025-09-30",
              "filed": "2025-10-22",
              "restated": null,
              "pct": 28.2
            },
            {
              "end": "2025-06-30",
              "filed": "2025-07-18",
              "restated": null,
              "pct": 34.1
            }
          ]
        },
        "pretax_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-21",
          "value_musd": 4316.9
        },
        "net_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-21",
          "four_quarters_end": "2026-09-30",
          "value_musd": 3663.9,
          "four_quarters_musd": 14766.7
        },
        "operating_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-21",
          "first_end": "2025-12-31",
          "value_musd": 12307.9
        },
        "capital_spending": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-21",
          "first_end": "2025-12-31",
          "value_musd": 932.9
        },
        "free_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-21",
          "first_end": "2025-12-31",
          "value_musd": 11375.1
        },
        "diluted_share_change": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-21",
          "base_end": "2025-09-30",
          "pct": -3.3
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        "cash": {
          "status": "ok",
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          "value_musd": 8223
        },
        "debt": {
          "status": "ok",
          "end": "2026-09-30",
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          "value_musd": 15132.4,
          "composition": "non-current long-term debt plus short-term borrowings"
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          "end": "2026-09-30",
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          "value_musd": -6909.4
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        "deferred_revenue": {
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          "end": "2026-09-30",
          "filed": "2026-10-21",
          "value_musd": 1779.6,
          "yoy_pct": 3.2
        },
        "backlog": {
          "status": "not reported"
        },
        "receivables": {
          "status": "not reported"
        },
        "inventory": {
          "status": "not reported"
        },
        "equity": {
          "status": "ok",
          "end": "2026-09-30",
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          "value_musd": 29286.3
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        "market_value": {
          "status": "ok",
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          "basis_filed": "2026-10-21",
          "value_musd": 255208.2
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        "enterprise_value": {
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          "value_musd": 262117.6
        },
        "ev_sales": {
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          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-21",
          "multiple": 5.3
        },
        "ev_ebit": {
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          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-21",
          "multiple": 16.8
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        "pe": {
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          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-21",
          "multiple": 17.3
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        "pb": {
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          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-21",
          "multiple": 8.7
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        "fcf_yield": {
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          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-21",
          "pct": 4.5
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    "short_interest": {
      "status": "ok",
      "settlement": "2026-10-15",
      "published": "2026-10-26",
      "short_pct_of_outstanding": 2.1,
      "days_to_cover": 2.5,
      "change_pct": 4.6
    },
    "insiders": {
      "status": "ok",
      "as_of": "2026-11-15",
      "windows": [
        {
          "days": 90,
          "status": "ok",
          "from": "2026-08-18",
          "bought_usd": 0,
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          "bought_unpriced": 0,
          "sold_unpriced": 0
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  },
  "body_markdown": "## Current Thesis\n\nNetflix's shares are more likely to lag the S&P 500 than lead it over the next three months. Members are using the service less and the 2026 ad revenue target was cut. Nothing scheduled before the fourth-quarter report can show a turn. That report and the 2027 outlook, expected around 2027-01-20, decide the call. Nielsen's combined September–October viewing-share release, expected around 2026-11-20, is the only check before then.\n\nThe shares closed at $62.69 on 2026-11-12. That is $0.70 above the 52-week closing low of $61.99 set on 2026-10-28, and 46.3% below the 52-week intraday high of $116.73 from 2025-11-13. Tradingpedia put Netflix at 17.3 times forward earnings with a 4.4% free cash flow yield at the 2026-11-10 close. At that multiple the market has already priced a slower-growth company. The open question is whether engagement steadies enough to hold it.\n\nCompany news since early November has been about programming and product. Netflix started a limited US test of an \"AI Discover\" tab on 2026-11-04. It ordered a \"Stranger Things\" prequel series for 2028 on 2026-11-06 and added a 150-film Korean collection on 2026-11-10. None of this changes reported numbers before January.\n\n## Bull Case\n\n- **Profit and cash flow grew strongly.** Third-quarter 2026 operating income rose 37% to $4.5 billion, a 34.6% margin, on revenue up 12% to $12.9 billion. Diluted earnings per share (EPS) rose to $0.87 from $0.59, and free cash flow was $2.9 billion (shareholder letter, 2026-10-20).\n- **Buybacks reached a record.** Netflix bought back 63.9 million shares for $4.8 billion in the third quarter, its largest quarter ever. It had $22.3 billion of authorization left (shareholder letter, 2026-10-20).\n- **Discovery is being rebuilt.** The AI Discover tab recommends titles by mood and interest. It entered a limited US test on 2026-11-04 (company news) and is aimed at members who open the app less often.\n- **A new ad partner signed.** Mercado Libre said on 2026-10-28 that it will start a partnership with Netflix in early 2027. The deal ties connected-TV ad campaigns to marketplace and payment results, ahead of ad-tier launches in 15 more countries planned from March 2027.\n- **Most brokers still rate it a Buy.** MarketBeat counted 2 Strong Buy, 35 Buy, 17 Hold and 2 Sell ratings on 2026-11-08, with a consensus target of $89.14. MoffettNathanson reaffirmed its Buy rating with a $90 target on 2026-10-21.\n- **Members watch less but rarely leave.** Research firm Antenna puts Netflix's US monthly cancellation rate at about 2%, the lowest among streamers (cited by Bloomberg News, 2026-10-25).\n\n## Bear Case\n\n- **The ad target was cut.** On 2026-10-20 Netflix lowered its 2026 ad revenue outlook to about $2.7 billion from about $3 billion, citing a slower rollout of ad-product features. It also cut its free cash flow outlook to about $12.0 billion from $12.5 billion (shareholder letter).\n- **Fourth-quarter guidance missed consensus.** Netflix guided to $13.4 billion of revenue and $0.67 of EPS, against consensus of $13.52 billion and $0.73 (shareholder letter, 2026-10-20). The guided 26.0% operating margin includes about 1.2 points of job-cut costs.\n- **Members use the service less.** Bloomberg News reported on 2026-10-25 that internal Netflix figures show members using the service on fewer days each month. Apptopia says US subscribers who did not open the app rose 16.6% from a year earlier in the third quarter.\n- **YouTube is taking TV time.** Nielsen's August 2026 Gauge, published 2026-10-22, put Netflix at 7.7% of US TV viewing time, down from 7.8% in July. YouTube reached a record 15.8%.\n- **Executives sold the net shares from exercises.** On 2026-11-03 co-CEOs Greg Peters and Ted Sarandos each exercised 54,388 options and had 27,076 shares withheld for tax at $62.34. Sarandos sold the remaining 27,312 shares at $66.20 on 2026-11-04, and Peters sold his 27,312 at $63.62 on 2026-11-09 (SEC Form 4 filings).\n- **The lowest target sits below the price.** Wells Fargo, rated underweight, has a $57 target, the lowest published (TipRanks, 2026-10-23).\n\n## Setup & Price Structure\n\nThe shares closed at $62.69 on 2026-11-12, down 19.8% over three months from $78.16 on 2026-08-14 (adjusted daily closes). The price sits below the 50-day moving average of $69.59 and the 200-day moving average of $80.60, both as of 2026-11-12. Both averages sit above the price, which describes a downtrend that has not reversed.\n\nCloses from 2026-11-05 to 2026-11-12 ranged from $62.69 to $65.56. The 52-week closing low of $61.99 on 2026-10-28 is the nearest level below. A close under it would set a new low for the year. A sustained move back toward the 50-day average would be the first sign of the shares leading.\n\nInsider sale prices fall inside that same range. Chief Financial Officer Spencer Neumann sold 9,253 shares at $66.15 and Chief Legal Officer David Hyman sold 5,727 at $64.55 on 2026-11-04, alongside Sarandos at $66.20. Peters sold at $63.62 on 2026-11-09 (SEC Form 4 filings). Director Bradford Smith sold 17,980 shares at an average $64.03 on 2026-10-26 under a pre-arranged Rule 10b5-1 trading plan.\n\nThe buyback is reducing the share count, so no new shares are coming to market. The next earnings report is about ten weeks away.\n\n## Catalyst Calendar\n\n- **~2026-11-20 (est.):** Nielsen 'The Gauge' US TV viewing-share data for September and October 2026, released together. Shows whether Netflix's share of US TV time recovers toward July's 7.8% or keeps slipping from August's 7.7%; it is the first release under Nielsen's adjusted methodology, which may trim streaming shares.\n- **~2027-01-20 (est.):** Fourth-quarter 2026 results and 2027 outlook. Shows whether fourth-quarter revenue reaches the $13.4 billion guidance, whether 2026 ad revenue reaches about $2.7 billion, and what revenue growth and margin Netflix guides for 2027.\n- **~2027-03-01 (est.):** Start of ad-tier launches in 15 more countries. Tests whether the delayed ad-product rollout is back on schedule and whether partnerships such as Mercado Libre's add ad revenue in 2027.\n\n## What Would Change Our Mind\n\nA daily close above $70, over the 50-day moving average and every November 2026 insider sale price, which would show the shares leading; or fourth-quarter revenue above the $13.4 billion guidance with 2026 ad revenue above about $2.7 billion.\n\n## Correlation Notes\n\nNetflix's shares move more on company-specific engagement and advertising news than on the broad mega-cap technology trade. Alphabet's YouTube is the competitor whose results matter most to the debate. Benzinga reported on 2026-10-29 that YouTube's living-room business earned more in one quarter than Netflix's full-year ad forecast. Disney is the other main comparison for streaming spending. Its managers were asked to target 20% annual cost savings (Benzinga, 2026-11-03).",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-12T23:52:23+00:00",
  "last_synthesized": "2026-11-12",
  "date_modified": "2026-11-12",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}