Why Netflix Stock Dropped Today
Key Points
Wells Fargo thinks Netflix's shares could fall 20%.
Potential strategies to boost viewership are risky.
- 10 stocks we like better than Netflix ›
Shares of Netflix (NASDAQ: NFLX) fell on Friday after analysts predicted a worrisome downturn in viewer engagement trends.
Image source: The Motley Fool.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
Views may be getting harder to come by
Wells Fargo analyst Steven Cahall placed an underweight (read: sell) rating on Netflix's stock. He warned that the streaming titan's share price could fall roughly 20% to $57.
Cahall is concerned about what he sees as a dearth of hit series. In turn, he estimates that views for Netflix's top 100 original shows could decline by more than 20%.
"Engagement trends look worrying to us," Cahall said. "Netflix has lacked big original series, and it's showing."
Cahall believes popular new shows are necessary to drive subscriber gains and watch hours, which are becoming increasingly important as advertising grows to be a larger part of Netflix's business.
No easy fix
Potential solutions would all come at a cost. Spending more in an attempt to create more hit shows would raise Netflix's content costs and potentially dent its profit margins. The same would be true if Netflix purchased more sports rights to boost engagement.
An acquisition to bolster its content library is another option. But the price is likely to be high. Netflix was recently outbid by Paramount Skydance for Warner Bros. Discovery's HBO Max streaming service and studio assets. Other takeover targets might also trigger bidding wars, and any potential merger would come with integration risks.
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 $406,141!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,347,745!*
Now, it’s worth noting Stock Advisor’s total average return is 940% — a market-crushing outperformance compared to 211% 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 September 18, 2026.
Wells Fargo is an advertising partner of Motley Fool Money. Joe Tenebruso 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
