Netflix said it was appealing against the decision
Netflix AFP

As of February 26, 2026, the narrative surrounding Netflix is one of intense volatility. The stock has been under significant pressure due to a massive, high-stakes bidding war for Warner Bros. Discovery (WBD) and unexpected political friction.

Netflix shares closed at $78.04 on February 24, 2026, gaining 2.66% on the day but remaining down significantly from their 2025 peak of $134.12. Despite a slight daily rebound, the stock has declined roughly 20% year-to-date, as the "streaming wars" have evolved into a consolidation war.

The Warner Bros. Discovery Bidding War

The primary driver of Netflix's stock in early 2026 is its $82.7 billion bid to acquire the studios and streaming assets (HBO/Max) of Warner Bros. Discovery.

  • The Rival Bid: On February 23, 2026, Paramount Skydance submitted a superior $31-per-share offer to buy WBD outright, surpassing Netflix's $27.75-per-share agreement.
  • The "Match" Window: Under the current merger agreement, Netflix has a four-day window to match the offer or walk away. Investors are fearful that Netflix will "overpay" to secure the assets, leading to the recent sell-off.
  • Political Headwinds: Adding to the uncertainty, the deal has faced public criticism from political figures, including recent social media posts targeting Netflix board member Susan Rice, which has increased fears of a difficult regulatory approval process.

Q4 2025 Financial Results (Reported January 20, 2026)

Netflix's underlying business remains fundamentally strong, even as the stock price fluctuates. The company reported record-breaking figures for the final quarter of 2025:

  • Subscriber Growth: Netflix crossed the 325 million paid membership milestone.
  • Revenue: Q4 revenue hit $12.05 billion, an 18% increase year-over-year.
  • Earnings: EPS for the quarter was $0.56, beating analyst estimates of $0.55.
  • Ad Revenue: A major highlight of 2025 was the ad tier, which generated over $1.5 billion in revenue. Management expects this to double to $3 billion in 2026.

2026 Outlook and Investor Concerns

While Netflix's organic growth is healthy, management has introduced several measures that have dampened near-term investor enthusiasm:

  • Buyback Pause: Netflix has paused its share buyback program to preserve the cash necessary for the WBD acquisition.
  • Guidance: The company projects 2026 revenue of $50.7 billion to $51.7 billion. However, the operating margin target of 31.5% includes roughly $275 million in anticipated acquisition-related expenses.
  • The March 20 Vote: All eyes are now on the March 20, 2026 shareholder meeting at Warner Bros. Discovery, which will largely determine if Netflix's strategic "gamble" succeeds.

Analyst Sentiment

Wall Street remains divided. Consensus currently sits at a Hold (Zacks Rank #3). While firms like Wedbush see a path to $130+ if the WBD deal is successfully integrated, others caution that the "merger of giants" carries massive execution risk and could dilute Netflix's industry-leading margins.