Netflix Earnings Open the Door to a Rebound With the Warner Deal in Sharp Focus

Netflix (NFLX) stock has been on a bumpy ride lately, largely due to its planned $83 billion acquisition of Warner Bros. Discovery, a deal that will be under intense scrutiny when the streaming giant reports fourth-quarter earnings after Tuesday’s close.

Netflix hit Wall Street’s revenue target last quarter with $11.51 billion in sales, up 17.2% year over year. Results were mixed with its EPS outlook for the current quarter topped expectations, but EBITDA came in well below forecasts. The company ended the period with 317.2 million users, a 12.2% increase from a year earlier.

Key Highlights

• Netflix’s fast-growing advertising business will be a key focus in Q4, testing whether ad-tier adoption and monetization are scaling in line with management’s ambitions during the crucial holiday period. Launched in late 2022, the ad-supported tier marks a major strategic pivot, and sustained progress here is critical not only for revenue growth but also for Netflix’s valuation narrative as a hybrid subscription-and-advertising media company.
• Investors will be closely watching Netflix’s Q4 margins and cash generation to gauge the quality and sustainability of its earnings growth. After highlighting operating discipline in Q3 with margins expanding despite heavy content and tech investment. The key question is whether this improvement can be maintained amid higher seasonal marketing and content costs. Strong, consistent free cash flow is increasingly central to Netflix’s investment case, underpinning buybacks and strategic flexibility, and reflecting the company’s shift from aggressive spending growth to a more disciplined, ROI-focused model that highlights its operational leverage.
• Netflix shares have fallen 15% since Dec. 5, when they first announced plans to acquire Warner Bros. Discovery’s assets. The company has since revised its bid to an all-cash offer worth $83 billion, or $27.75 per share.
• The Q4 results may offer a welcome distraction for investors. Netflix shares have dropped 15% since Dec. 5, when it announced a deal to buy Warner’s streaming and studio assets for $27.75 a share—$23.25 in cash and the remainder in Netflix stock, with the cable business spun off to investors. On Tuesday, Netflix revised the proposal to an all-cash offer.

Analysts Expectation

• KeyBanc cut its price target on Netflix (NFLX) to $110 from $139 but kept its Overweight rating on the stock.
• BMO Capital reiterated its Outperform rating on Netflix (NFLX) and maintained a $143 price target.

NFLX Q4 2025 earnings after-market (4:01 pm ET) Tuesday Jan 20, 2026                         

Technical Analysis Perspective

• NFLX has been in an uptrend since June 2022, consistently making higher highs and higher lows.
• In early July 2025, stock broke below the rising trendline drawn from the April 2025 low at 82.21.
• The recent decline began after a rectangular reversal pattern formed between April and October 2025.
• Key support from November 2024 sits at 82.25/82.00.
• Post-earnings, the stock is likely to move toward 82.25 as long as resistance at 91–92 holds; any downside is expected to be short-lived.
• A decisive break above 92 would ease downside pressure and open the way toward the 103–105 resistance zone.

Weekly Candlestick Chart

NFLX Seasonality Chart:

Since 2006, NFLX has finished January higher 70% higher, with an average gain of 15.4%, and February higher, 74% of the time, with an average gain of 3.4%.

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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.