Netflix (NASDAQ: NFLX) delivered blockbuster third-quarter 2026 results, beating Wall Street estimates for both earnings and revenue. However, Netflix stock is sinking as Bernstein cautions that any changes in the company’s business model could take years to pay off.
Specifically, the firm said the streaming platform’s new content leadership brings deep experience across television, film, and streaming, but management’s messaging still focuses on traditional content, live events, and licensing.
While these areas could help Netflix’s trajectory, Bernstein warned that any important changes may take years to show up in financial performance. Accordingly, it cut its Netflix stock price target from $95 to $80 but kept an “Outperform” rating, pointing to limited near-term tailwinds and uncertainty about the company’s 2027 outlook.
Meanwhile, NFLX shares fell 6% to $64.56 in pre-market trading on October 21, extending this year’s already severe losses.
2027 will be crucial for Netflix stock
As mentioned, the assessment comes following Netflix’s third-quarter results, which have left analysts wondering about 2027 as a potentially crucial period for Netflix. Bernstein sees no obvious catalysts in 2026, and Wedbush – which reiterated its $75 NFXL price target – says a 2027 expansion could delay ads as a meaningful profit driver.
Indeed, the advertising outlook weakened significantly, and Netflix lowered its full-year revenue target to $2.7 billion – about 10% below its previous objective. Although the ad-supported tier is set to expand into 15 additional markets in 2027, Wedbush thinks it will take longer for it to become a significant profit engine.
Likewise, Netflix’s updated 2026 outlook suggests revenue growth could finish below the midpoint of its previous guidance range of 13% to 14%, while operating margins are expected to remain intact at 31.5%. Bernstein said the company’s underlying pricing and subscriber fundamentals remain solid for now, but the outlook leaves investors looking for clearer signs of future growth for the Netflix stock.
Similar to Wedbush, Bernstein believes the slower progress is due to the pace of advertising product rollouts, not a lack of demand. This suggests the shortfall reflects a delay rather than a fundamental disruption to the business. Nonetheless, both firms believe the broader strategic question remains unresolved.
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