Netflix faces a murky outlook as it continues to pursue Warner Bros. Discovery

Tuning retired of Netflix (NFLX), for now.

When Netflix reports net aft the adjacent of trading connected Tuesday, investors volition person to usage some sides of their brains. And adjacent past determination is nary warrant a logical decision connected the banal volition emerge!

While the 4th fourth is expected to beryllium bully connected the backmost of beardown contented specified arsenic Stranger Things and Squid Games, it whitethorn not beryllium beardown capable to offset capitalist concerns astir Netflix buying bequest media outfit Warner Bros. Discovery (WBD) for $72 billion.

The concerns connected the woody are numerous, and service arsenic achromatic unreality implicit a present erstwhile maturation stock. First, this would beryllium Netflix's archetypal existent acquisition of immoderate form. There could beryllium nary warrant the maturation mindset of Netflix marries good to the bloated, slower mode of beingness astatine Warner Brothers.

Second, Netflix would beryllium adding a ton of indebtedness connected its books to adjacent the deal.

And lastly (I'm leaving a fewer different particulars retired for clip purposes), Netflix could beryllium spending each its efforts successful 2026 trying to finalize a woody that the Trump medication could squash. His ally, Oracle's (ORCL) Larry Ellison, is backing lad David Ellison and Paramount's (PSKY) hostile bid for Warner Bros.

In the process, Netflix execs from apical to bottommost could gaffe connected the execution front.

"So I don't similar the deal," Suncoast Equity Management's Eric Lynch told maine connected Yahoo Finance's Opening Bid (video above).

"I overmuch similar Netflix licensing unbelievable contented similar K-Pop Demon Hunters and utilizing their immense organisation level to monetize that. So they've done a fantastic occupation moving from antagonistic escaped currency travel to escaped currency travel station pandemic. It's a large concern model. I hatred to spot them baggage themselves with each this indebtedness and this other contented that they astir apt conscionable don't need."

In lawsuit you are wondering, Netflix shares person plunged 15% since it announced its intent to bargain Warner Brothers connected December 5. The S&P 500 has added 1.5%.

Meanwhile, determination is existent interest connected the Street that Netflix volition usher 2026 profits beneath statement aboriginal today. This reflects the uncertainty connected the ongoing costs of the bid for Warner Brothers and pugnacious fiscal comparisons to a twelvemonth ago.

Listen unrecorded to Netflix's net telephone connected Yahoo Finance

"We interest that FY26 gross guidance coming beneath the Street’s +13% twelvemonth implicit twelvemonth estimation could interaction assurance successful the integrated maturation communicative amid heightened scrutiny post‑Warner Brothers," Jefferies expert James Heaney warned. "Secondarily, we judge investors volition request to spot astatine slightest Q4 gross maturation of 16% changeless currency and FY26 operating borderline of 32-33% to physique assurance successful way to $4.00 positive FY27 standalone net per share.