Wall Street Is Punishing Netflix on Guidance, but Price Hikes Reveal the Real Story
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Netflix reported Q1 revenue of $12.25 billion, beating expectations, but its guidance for Q2 missed estimates, causing a 10% drop in premarket trading. Despite this, the company's price hikes and healthy subscriber trends signal confidence in its growth roadmap.
Netflix reported first-quarter revenue of $12.25 billion, exceeding Wall Street expectations. Adjusted earnings reached $1.23 per share, beating prior guidance. However, second-quarter guidance missed estimates, causing shares to drop over 10% in premarket trading. The company's subscriber trends remained healthy, and ad revenue continued to grow. Netflix raised U.S. prices across every tier in March, locking in higher revenue per user. The guidance miss reflects typical quarterly variability in a business built on content timing and pricing. Netflix still projects healthy growth for 2026, with a forward P/E around 31 times.
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