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<Research>CMSI Slashes Netflix (NFLX.US) TP to US$126 as Quarterly Results Beat, but Profit Margin Guidance Misses
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Netflix (NFLX.US)'s 4Q25 results beat expectation, with quarterly revenue reaching US$12 billion, up 18% YoY, in line with forecast, CMSI released a research report saying. The growth was primarily driven by the launch of robust hit content, such as Stranger Things season finale. Although the guidance for 1Q26 and full-year revenue were in line with market consensus, the profit margin guidance missed, leading to a pullback in its share price during after-hour trading session. Therefore, the broker kept rating at Overweight on Netflix, and slashed its target price from US$142 to US$126 due to higher discount rates resulting from a downgrade in the sub-sector rating and M&A execution risks, corresponding to a 39x/ 33x PE ratio for FY2026/ FY2027, respectively. Although the uncertainty of the Warner Bros. Discovery (WBD.US) merger has not been fully resolved, it is not expected to have a substantial impact on its 2026 results. With the significant valuation correction, the current stock price level is attractive. AASTOCKS Financial News Website: www.aastocks.com |
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