Netflix shares drop to 26-month low despite revenue growth

Netflix shares declined to $64.10 on Wednesday, marking the lowest point since August 2024. Although the company exceeded profit forecasts, a disappointing fourth-quarter projection prompted investors to sell.

That drop puts the stock about 50% beneath its $134.12 peak from mid-2025. Meanwhile, Netflix's trailing 12-month revenue stands at an all-time high.

Why Investors Sold Despite Netflix's Profit Beat

Third-quarter earnings per share reached $0.87, beating the $0.82 consensus among analysts, as reported by Reuters. Revenue rose 12% to $12.87 billion, in line with expectations.

Guidance was the trouble spot. The company forecast fourth-quarter EPS of $0.67, missing the average estimate of $0.73.

Netflix also cut its 2026 advertising revenue goal to roughly $2.7 billion from $3 billion. The shareholder letter attributed the reduction to a slower-than-expected deployment of ad features.

The earnings release followed a volatile week. Netflix eliminated roughly 1,000 positions and appointed new chief creative and film heads.

"I know that we could do better."

Co-CEO Ted Sarandos acknowledged this on the post-earnings conference call. He said the company does not require a major strategic change, just improved execution in the United States.

What Netflix's Revenue Data Reveals

The revenue figures present a contrast to the stock's performance.

Netflix's trailing 12-month revenue hit approximately $50 billion in September. That works out to a 20.4% compound annual growth rate starting from 2015.

The previous growth pause occurred between early 2022 and mid-2023. After that, expansion picked up again, and operating margin rose to 34.6% from 28.2% a year ago.

Nevertheless, US demand is still uncertain. Antenna, a subscription analytics company, reported zero monthly net subscriber additions in the US for 2026 through September.

Netflix challenged that figure. The streamer stated that both global and US churn rates improved compared with the same period last year.

Netflix Stock Tests Key Support Levels Near 2021 High

Based on monthly price action, NFLX is testing its 2021 all-time high zone between $65 and $70. If the stock closes the month below that zone, the 0.618 Fibonacci retracement level at $61.29 would come into play. The next significant support is around $41.50.

Resistance is seen at $75.20, then $89.10. The monthly RSI has dropped to roughly 40.

On the daily timeframe, a descending parallel channel has been in effect since April 16. The channel's midline coincides with the $61 Fibonacci level.

Wednesday's low fell below the July 17 trough. The daily RSI, around 36, indicates strong bearish momentum but has not yet reached oversold territory.

Buyers did intervene early. As of writing, NFLX was trading at $66.39, a decline of 3.35% on the day, according to TradingView.

Netflix now finds itself caught between two competing stories. Profits and revenue continue to rise, but YouTube and TikTok are intensifying their competition for viewers. Whether the 2021 high level holds could indicate which narrative investors believe.