Stock Market Today, Oct. 21: Netflix Cuts Ad Revenue Guidance, Stock Slides 5%
Netflix (NASDAQ:NFLX), a global subscription streaming, advertising, and digital entertainment platform, closed at $65.04, down 5.31%. The stock fell after Netflix reported weaker Q4 revenue and weaker ad sales guidance; investors are watching ad growth and next-quarter guidance. Trading volume reached 96.6M shares, coming in about 171% above its three-month average of 35.6M shares. Netflix IPO'd in 2002 and has grown 54,263% since going public.
How the markets moved today
The S&P 500 (SNPINDEX:^GSPC) closed at 7,758, up 0.59%, while the Nasdaq Composite (NASDAQINDEX:^IXIC) finished at 26,703, up 1.05%. Among entertainment streaming, subscription video, advertising, and digital media services peers, Walt Disney (NYSE:DIS) closed at $111.83, up 0.14%, and Comcast (NASDAQ:CMCSA) closed at $22.08, down 1.25%, highlighting a mixed media tone.
What this means for investors
It was a truly mixed Q3 earnings call for Netflix. While its advertising sales are projected to grow over 80% from last year, new guidance of $2.7 billion in ad revenue for the year is 10% below its previous outlook of $3 billion.
This isn't a thesis-busting amount of money for a company doing nearly $50 billion in sales annually, but management has been urging investors to focus on its advertising growth over the last few quarters, and now it has missed its own guidance.
With short-form videos gradually eating into Netflix's view hours -- which only grew 2% in the first half of 2026 -- the market's disappointed reaction today to the company's soft guidance isn't unreasonable.
That said, 12% sales growth with expanding margins is by no means awful -- Netflix just may not be the powerful growth stock it once was. However, with 95% of its capital spending going toward new content and international markets providing steady growth (such as 18% sales growth in India), the stock is nowhere near being a "cigar-butt" stock.
I'm not desperate to add to my NFLX shares right now, but if it gets much cheaper than its current forward price-to-earnings ratio of 19, I'd definitely consider buying again, especially if ad growth lives up to expectations.
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Josh Kohn-Lindquist has positions in Netflix. The Motley Fool has positions in and recommends Netflix and Walt Disney. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.
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