Netflix: Down Nearly 50% Over the Past Year, Is the Stock a Buy on This Latest Dip? Here's the Real Issue Behind the Stock's Decline.

Netflix (NASDAQ: NFLX) shares person been successful a slump, and things lone got worse aft the video streaming institution reported its second-quarter results aft the closing doorbell Thursday. After the stock's 7.3% descent connected Friday, the banal is down much than 26% frankincense acold successful 2026, and its shares person been astir chopped successful fractional implicit the past year.

While immoderate investors mightiness beryllium tempted to bargain the dip, I wouldn't unreserved successful yet.

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Turning into a cablegram institution

Netflix's biggest contented successful my presumption is that the institution is starting to look much and much similar the cablegram networks it helped disrupt with its streaming service. Its maturation present appears to beryllium driven much by terms increases than subscriber growth, and the institution hasn't been helping its lawsuit by continuing to publically study connected less metrics to springiness investors penetration into its business.

The institution stopped reporting quarterly subscriber numbers past year, and starting adjacent year, it plans to standard backmost its reporting of viewership information to conscionable erstwhile a year. (It presently does truthful doubly a year.) Viewing hours were up conscionable 2% successful the archetypal fractional of 2026, though that was a flimsy summation from the 1.5% maturation it saw successful the archetypal fractional of 2025.

Meanwhile, similar linear TV, Netflix is besides starting to thin into unrecorded events and advertising. Securing highly anticipated unrecorded programming, specified arsenic large sporting events, tends to beryllium expensive, and this twelvemonth is expected to relationship for implicit 5% of Netflix's contented spending contempt representing lone 1% of its viewing hours. However, absorption believes this benignant of programming is liable for beardown caller subordinate sign-ups, and has made it a instauration of its advertizing push.

The institution said it is already successful "advanced stages" for upfront advertizing successful the U.S., and is expected to fastener successful commitments soon. Netflix has been offering lower-cost, ad-supported subscription tiers successful definite markets to assistance thrust growth.

For Q2, Netflix saw coagulated growth, with gross rising 13% to $12.56 billion. Adjusted net per stock (EPS) climbed 11% to $0.80. Analysts connected mean had been looking for EPS of $0.79 connected gross of $12.59 billion, according to estimates compiled by LSEG. Revenue growth, meanwhile, was beauteous accordant crossed regions, ranging from 14% successful the U.S. and Canada to 20% successful the Asia-Pacific region.