Netflix Crushes Earnings, Then Crushes Its Own Stock — Down 10% on Weak Guidance

Netflix just reminded everyone why Wall Street has trust issues.

The streaming giant absolutely demolished Q1 expectations — $1.23 earnings per share versus the $0.66 analysts expected. Revenue came in at $12.25 billion, beating estimates by $80 million. By any normal measure, this was a blowout quarter.

And the stock dropped 10% in premarket trading.

Welcome to the expectations game, where beating the past doesn’t matter if you can’t promise enough of the future.

The culprit? Q2 guidance. Netflix projected revenue growth of just 13.5% year over year for the second quarter — a step down in momentum that spooked a market accustomed to acceleration. Worse, the company merely maintained its full-year 2026 outlook when many investors were expecting a raise after such a strong Q1.

Then came the gut punch: co-founder Reed Hastings announced he’ll leave the board in June when his term expires.

Hastings took Netflix from a mail-order DVD company to the most dominant streaming platform on Earth. He stepped down as co-CEO in 2023 but remained as executive chairman. His full departure feels symbolic — the last thread connecting Netflix to its scrappy, disruptive origin story.

Wall Street’s reaction was swift and emotional. The stock saw its worst single-day drop in four years.

But here’s what the panic sellers are missing: Netflix still has 300+ million subscribers, pricing power that’s barely been tested, and an ad-supported tier that’s growing faster than the premium tier ever did. The password-sharing crackdown added 55 million paid accounts. The content pipeline includes live sports, gaming, and AI-personalized recommendations.

This isn’t a company in trouble. This is a company that set the bar so high it tripped over it.

The Play

NFLX is a buy-the-dip candidate, but don’t catch the falling knife today. Wait for the stock to find support — likely in the $850-$870 range where it consolidated before earnings. If it holds there, you’ve got a fundamentally sound company trading at a discount to its Q1 reality. Set alerts, not market orders.