Netflix co-CEO Ted Sarandos

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Forget about chilling, it’s all about expectations! That is one of the key takeaways from Netflix’s first-quarter earnings update and outlook late Thursday. The latest figures exceeded most expectations, and the global streaming giant stuck to its 2026 guidance — but many investors had hoped for more.

Blame the recent U.S. price hikes and the recently returned stock swagger after the streamer dropped out of the bidding war for Warner Bros. Discovery and received that $2.8 billion break-up fee.

Netflix shares dropped 9 percent in Thursday after-market trading and as of 7:15 a.m. ET on Friday were down 10.8 percent at $96.20.

Wall Street analysts have started sharing their takes on the results, the outlook and the stock – and on that upcoming exit of Netflix founder and chair Reed Hastings, along with latest commentary by co-CEOs Ted Sarandos and Greg Peters.

Among the issues dissected are the price hikes, advertising momentum, the ongoing debate about Netflix’s engagement trends, and, yes, the World Baseball Classic. Read their commentary and insights below.

Analyst: Michael Morris, Guggenheim Securities

Stock rating and price target: buy, $120, down $10 from $130 previously

Takeaways: The title of Morris’ report put the spotlight on why Netflix’s stock took a hit following its latest financial and operating update. “Investors Retrench as ‘Beat and Maintain’ Comes up Short of Expectations.” He explained: “Netflix’s first-quarter results exceeded expectations across key metrics, yet the stock faced pressure as investors had anticipated more than a simple guidance reiteration given the strong quarter and the $2.8 billion WBD termination fee windfall.”

In addition, the streamer’s second-quarter revenue guidance “implies a deceleration to 12 percent foreign exchange-neutral year-over-year growth from the first-quarter’s 14 percent, further tempering near-term enthusiasm.” Morris’ take: “Management’s decision to maintain rather than raise guidance reflects a measured approach given it remains early in the year with ‘plenty of time to go, plenty of work left to do’.”

The departure of Netflix’s founder and chair Hastings also didn’t rattle the analyst, who described the move as “the completion of a long-planned succession process that began over a decade ago.” Still, all in, Morris cut his stock price target on Netflix, explaining: “We modestly temper our near-term outlook in line with management guidance and lower our price target to $120 on a more tempered target multiple.”

Analyst: Jeffrey Wlodarczak, Pivotal Research Group

Stock rating and price target: hold, $96, up $1 from $95

Takeaways: Given a mixed bag-type of quarter, this analyst updated his model for Netflix. “We lowered our subscriber estimates and increased our ARPU (average revenue per user) forecast, which led to a modest $1 increase in our YE’26 target price to $96,” he explained.

So far, so good. But he remains worried about competition for people’s attention and time. “While engagement held around +2 percent, we remain concerned that short-form entertainment (such as TikTok, Instagram, X, YouTube shorts and Snap) is doing to streaming what streaming has done to traditional TV as, especially younger, consumers spend an ever- increasing time on these social media platforms amidst plummeting attention spans, which is fundamentally negative for long-form content,” Wlodarczak offered. “This is exacerbated by free ad-supported (FAST) TV channels that appear particularly attractive to increasingly challenged lower per-capita income households.”

The Pivotal analyst also touched on the abandoned bid for WBD, but not in the way you may expect. “This backdrop is exacerbated by what we view as a much more powerful global competitor in the combined Paramount Skydance/WBD, although admittedly they will in the medium term be very focused on debt reduction, hampering their ability to be super aggressive,” he argued, sharing a less than bullish conclusion: “Our overall view is that Netflix is properly valued at current levels and we believe increasingly growth is likely to be driven by price increases, and advertising gains off a relatively low base, rather than subscriber growth. We view the story as lacking excitement relative to a rich valuation.”

Analyst: Alicia Reese, Wedbush Securities

Stock rating and price target: outperform, $118

Takeaways: Reese saw no need

Netflix Earnings Review for Q1 2026 as Stock Drops: What Analysts Say