Streaming stocks have been popular for investors as demand for on-demand entertainment rises. Netflix is testing investors’ confidence with a deal for Warner Bros. assets. The company aims to expand content libraries and global reach beyond streaming. Netflix’s stock is up 8% YTD but has fallen 20% since the June high due to concerns over valuation and the Warner Bros. deal.

Netflix agreed to buy Warner Bros. Discovery’s studios and HBO assets for $83 billion. The deal includes $27.75 per share in cash and stock. Netflix shares slipped after the announcement. U.S. officials have raised antitrust questions, adding uncertainty. The deal is expected to expand Netflix’s content library and global reach without job cuts.

Netflix reported third-quarter fiscal 2025 results with paid streaming revenue at $11.51 billion, up 17% YoY. Operating income was $3.25 billion, up 12% YoY, and net income totaled $2.55 billion, up 8%. Free cash flow rose to $2.66 billion, with $9.29 billion in cash and equivalents. Netflix is expanding into live events, gaming, and advertising.

Management reaffirmed full-year 2025 revenue near $45.1 billion with 16% growth. Q4 is forecasted to have 17% revenue growth and a 24% operating margin. Netflix gave no guidance for fiscal 2026, but Wall Street’s 2025 EPS consensus sits near $24.6. Analysts are cautiously optimistic about Netflix’s growth momentum amid the Warner Bros. Discovery deal.

Morgan Stanley raised its 12-month target to $150, citing steady subscriber growth and improving ad-tier economics. Wedbush moved its target to $140, highlighting expanding free cash flow. Goldman Sachs lifted its target to $114, and J.P. Morgan kept an “Overweight” stance with a $124 target. The consensus “Moderate Buy” rating implies a 34% upside potential.

Read more at Yahoo Finance: Netflix Says the Warner Bros’ Deal Is All About ‘Growth.’ Will NFLX Stock Keep Growing in 2026?