Netflix (NFLX) Stock: What to Expect From Tuesday’s Earnings?

TLDR

• Netflix reports Q4 earnings on January 20, 2026, with analysts expecting EPS of $0.55 (up 28% year-over-year) and revenue of $12 billion
• The final season of Stranger Things drove strong subscriber engagement, but surveys show users stayed for other content like Bridgerton and WWE programming
• NFLX shares are down 33% from their 52-week high due to concerns over the Warner Bros. Discovery acquisition and legal challenges from Paramount
• The company’s ad-supported tier is showing improving retention and represents a growing revenue opportunity with the lowest ad load among streamers
• Options traders expect a 7.78% move in either direction following the earnings announcement, higher than the four-quarter average of 5.82%

Netflix reports its fourth-quarter earnings on January 20. Wall Street expects the streaming company to deliver strong results.

Netflix, Inc., NFLX

Analysts forecast earnings of 55 cents per share for Q4. That represents a 28% jump from the same period last year. Revenue is projected to reach $12 billion for the quarter.

The final season of Stranger Things drew viewers back to the platform during the holiday period. But questions remain about whether Netflix can maintain this momentum.

Shares have dropped 33% from their 52-week high. The decline stems from uncertainty around the company’s bid to acquire Warner Bros. Discovery assets. Paramount has sued Warner Bros. Discovery, claiming its own bid was superior to Netflix’s offer.

Survey Data Points to Staying Power

Wedbush analyst Alicia Reese believes the quarterly strength extends beyond Stranger Things. Recent survey data shows subscriber numbers held steady even after the show ended.

Many lapsed subscribers returned to Netflix in recent months. These users stayed for content beyond Stranger Things. Titles like Bridgerton and upcoming WWE programming kept them engaged.

Reese points to Netflix’s massive content library as a key factor. The variety ensures consistent engagement across quarters. This makes the platform less dependent on any single show.

The analyst maintains that Netflix’s content pipeline supports a durable growth story. She recommends buying the stock at current levels.

Options traders expect a 7.78% move in either direction following the earnings report. This exceeds the average post-earnings move of 5.82% over the past four quarters.

The Advertising Opportunity

Reese calls Netflix a “money maker with or without the WBD assets.” She highlights the advertising opportunity as particularly undervalued by the market.

Netflix runs the lowest ad load among all streaming services and traditional TV. This creates a less intrusive experience for viewers.

Wedbush survey data shows retention among ad-tier subscribers improving each quarter. Fewer customers are switching away from this option. Reese notes that viewers don’t mind the current ad levels.

The company has room to slightly increase ad load without losing users. The profitability of this tier is already clear. Advertisers are moving to the platform thanks to Netflix’s data capabilities and partnerships with Amazon and other demand-side platforms.

The ad tier is becoming a core driver of sustainable revenue growth. If the Warner Bros. deal closes, production could ramp up across both studios. This would further enhance Netflix’s advertising leverage.

KeyBanc analyst Justin Patterson cut his price target to $110 from $139 but kept a Buy rating. He expects near-term valuation pressure from Warner Bros. deal uncertainty and tough comparisons with the 2025 content slate.

Patterson forecasts 2026 revenue growth of 13%, in line with expectations. However, he anticipates softer operating margins for the year.

BMO Capital analyst Brian Pitz maintains a Buy rating with a $143 price target. He notes robust Q4 engagement from Stranger Things, a record-setting Christmas Day NFL game, and the Jake Paul boxing match. He expects Q4 revenue growth of 16% excluding foreign exchange changes.

Wall Street currently has a Moderate Buy consensus on Netflix stock. The average price target of $127.23 suggests 45% upside from current levels. TipRanks’ AI Analyst gives the stock an Outperform rating with a $103 price target.

Netflix’s international business strength, content slate, and growing ad revenue are expected to drive Q4 results.

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