Why Netflix Stock Is Plunging in After-Hours Trading
Key Points
Netflix amended the terms of its acquisition agreement with Warner Bros. Discovery.
The company exceeded analysts' top and bottom-line expectations for the fourth quarter of 2025.
To ensure its financial health, Netflix is interested in accumulating cash.
- 10 stocks we like better than Netflix ›
Starting the shortened trading week on an inauspicious note, Netflix (NASDAQ: NFLX) stock dipped lower during regular trading hours today. And the stock is logging an even steeper decline after the bell. Netflix reported fourth-quarter 2025 financial results and other news, and investors aren't happy.
As of 5:25 p.m., shares of the streaming service are down 4.9% from their closing price of $87.26 during today's regular market session.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Getty Images.
Management is pressing the pause button, and investors aren't pleased
In its shareholder letter announcing fourth-quarter 2025 financial results, Netflix stated it would put its share buyback program on hold as it seeks to build its cash position -- a move meant to ensure its financial health during the acquisition of Warner Bros. Discovery.
Earlier today, Netflix announced that it had amended the agreement with Warner Bros. Discovery. In contrast, the original deal had included a mix of cash and Netflix stock; the new agreement provides for an all-cash transaction valued at $27.75 per Warner Bros. share.
With respect to the company's recent financial results, Netflix booked Q4 2025 revenue of $12.05 billion, surpassing the consensus among analysts that it would post sales of $11.97 billion. Similarly, Netflix reported Q4 2025 earnings per share (EPS) of $0.56, slightly better than the $0.55 analysts had anticipated.
Looking ahead, management projects 2026 revenue of $50.7 billion to $51.7 billion, representing year-over-year growth of 12% to 14%.
Is now the time for investors to nix Netflix stock from their portfolios?
While investors may be upset about the pause in the share buyback program, it's essential to recognize the company's strong performance in the last quarter of 2025 and the growth that management expects in the coming year. With Netflix stock trading at 39 times operating cash flow, a discount to its five-year average cash flow multiple of 59.2, today seems like a great time to click the buy button on Netflix stock.
Should you buy stock in Netflix right now?
Before you buy stock in Netflix, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Netflix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $474,578!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,141,628!*
Now, it’s worth noting Stock Advisor’s total average return is 955% — a market-crushing outperformance compared to 196% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of January 20, 2026.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
Recommended Articles
