Stock Market Today, Jan. 21: Netflix Falls After Fourth-Quarter Earnings and New All-Cash WBD Deal

Source Motley_fool

Netflix (NASDAQ:NFLX), a provider of on-demand streaming of movies and TV shows globally, closed Wednesday at $85.36, down 2.18%. The stock moved lower as investors weighed a Q4 earnings beat and a new all-cash bid for Warner Bros. Discovery. Trading volume reached 124.8 million shares, more than double the three-month average of 48.1 million. Netflix IPO'd in 2002 and has grown 71,247% since going public.

How the markets moved today

S&P 500 rose 1.16% to finish Wednesday at 6,875, while the Nasdaq Composite added 1.18% to close at 23,225. Among entertainment rivals, Walt Disney closed at $113.23, up 2.62%, and Warner Bros. Discovery (WBD) finished at $28.53, gaining 1.03%, as investors assessed evolving streaming strategies and deal speculation across the entertainment landscape.

What this means for investors

Shortly after the company announced a new potential all-cash bid for WBD yesterday, Netflix reported Q4 earnings that beat Wall Street’s expectations, but were ultimately deemed underwhelming. While sales and earnings per share jumped 18% and 30%, respectively, management’s “conservative” 2026 guidance for 14% revenue growth and $6 billion in free cash flow (FCF) — down from $9 billion in 2025 — left the market slightly disappointed.

That said, I think the quarter was acceptable and Netflix’s future remains bright. India remained a promising area of growth. Advertising sales are expected to double in 2026 (after rising 150% in 2025). Lastly, Netflix-branded content continues to garner higher engagement, reinforcing the value that could theoretically be generated from a WBD deal.

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Josh Kohn-Lindquist has positions in Netflix. The Motley Fool has positions in and recommends Netflix, Walt Disney, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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