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Netflix has been one of the worst-performing mega-cap stocks in Q4.
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Investor sentiment has been crushed by doubts about growth and ongoing M&A uncertainty.
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However, improving technicals and overwhelming analyst support suggest a rebound could be coming in Q1.
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Interested in Netflix, Inc.? Here are five stocks we like better.
As we head into the final few sessions of 2025, Netflix Inc. (NASDAQ: NFLX) is on track to finish Q4 as one of the market’s clear laggards. Shares of the streaming giant fell roughly 20% over the period, sharply underperforming the S&P 500, which logged a gain of more than 3%. In the broader context, Netflix is trading back near where it stood this time last year, having lost more than 30% since its all-time high in July.
Overall, the sell-off reflects a broad loss of confidence. Investors have questioned whether Netflix can maintain its historical growth rates, grown uneasy about its proposed acquisition of Warner Bros. Discovery, and have remained unsettled by October’s dodgy earnings report. However, there are several reasons to think the worst-case scenario is now priced in, and the stock’s risk/reward profile is skewing north. Let’s take a look at why Netflix could be a sneaky comeback contender for Q1.
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Starting with October’s earnings report, it was a clear disappointment that set the tone for the rest of the quarter, but it is worth separating optics from reality. Despite an EPS miss, Netflix still delivered its highest revenue print ever, and that distinction matters. Demand didn’t collapse, nor did the business suddenly lose relevance. Instead, the report undermined confidence in near-term execution and reignited doubts about the durability of growth.
Markets tend to punish uncertainty almost as much as, if not more than, bad news, and Netflix was hit with both at once. Growth skepticism resurfaced right as expectations were already elevated, creating the conditions for a rush to the exit and a sharp drop, despite the company having logged several quarters of solid earnings reports beforehand.
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This is often how worst-case-scenario quarters look. Investors stop giving management the benefit of the doubt, and sentiment swings decisively negative even if the broader equity market is doing well.
It didn’t help matters that in the weeks following October’s miss, further uncertainty was created by Netflix’s bid for Warner Bros. Discovery. The situation then became more complex after a competing offer from Paramount–Skydance exceeded Netflix’s bid, even if the Warner Bros. board has reportedly recommended that shareholders reject it in favor of Netflix’s proposal.
