January 20, 2026
2 min read
Market context
Netflix experienced a substantial rally beginning in early 2023 that produced more than 300% in returns. That advance ended in mid 2025 and shares finished about 35% below their highs.
Financial profile
Revenue has grown steadily for 24 months following a slowdown in 2022. Profit levels recovered and reached record readings across 2024 and 2025. The business converted into a consistent free cash flow generator and maintained a healthy balance sheet.
Acquisition move
The company submitted a $72 billion bid for Warner Bros. Discovery Studios. The proposal shifted attention away from recent financial strength. The transaction would add significant debt and could depress earnings for a period before any synergies are realized.
Earnings outlook
Consensus expects revenue to show modest growth versus the prior quarter while earnings per share are forecast to decline. Netflix missed EPS estimates in the prior quarter and another shortfall could increase pressure on the share price. Technical indicators are showing a bearish posture with the stock trading below the 10 and 20 day moving averages and failing to sustain levels above the 20 day average.
Options
Implied volatility on the option chain for the January 23 2026 expiration implies a move of approximately plus or minus $7. The February 20 expiration shows an IV near 47 percent which corresponds to a roughly plus or minus $10 move.
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This material is provided for informational and educational purposes only and does not constitute financial advice. All investments carry risk, including the potential loss of capital.
