Why Is Netflix Stock Down in Premarket Today? Q4 Earnings Beat Isn’t Enough

Netflix, Inc. (NFLX) shares are trading down 5.40% in premarket at $82.35 as of 5:15:31 AM EST on January 21, 2026, despite the streaming giant reporting fourth-quarter results that topped Wall Street expectations. The stock initially slipped 4% in after-hours trading following Tuesday’s earnings announcement, with the decline extending into Wednesday’s premarket session.

While the company delivered revenues of $12.05 billion and earnings per share of $0.56, both exceeding analyst forecasts, investor concerns center on slowing subscriber growth, cautious 2026 guidance, and mounting uncertainties surrounding Netflix’s proposed $72 billion acquisition of Warner Bros. Discovery.

Q4 Beat Fails to Impress as Subscriber Growth Slows

Netflix’s fourth-quarter performance showed strong financial metrics, with revenue climbing 17.6% year-over-year to $12.05 billion and operating income surging 30% to $2.96 billion. Operating margin expanded from 22.2% to 24.5%, while net income rose 29% to $2.42 billion.

The company now serves over 325 million paid memberships globally, approaching an audience of one billion people. Members watched 96 billion hours in the second half of 2025, up 2% year-over-year, driven by popular content including Stranger Things and Guillermo Del Toro’s Frankenstein.

However, the earnings beat failed to satisfy investors concerned about decelerating growth. Netflix added approximately 23 million subscribers in 2025, marking a dramatic slowdown from the 41 million customers gained during 2024. This amplified worries that Netflix’s growth has peaked since introducing its low-priced, advertising-supported tier in 2022.

The company’s 2026 revenue guidance of $50.7-$51.7 billion implies 12-14% growth, down from 16% in 2025, while first-quarter profit forecasts came in below analyst expectations. “Overall, this points to a challenging start to the year,” noted Investing.com analyst Thomas Monteiro.

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Warner Bros. Acquisition Creates Additional Uncertainty

The stock’s weakness is further compounded by Netflix’s amended all-cash offer for Warner Bros. Discovery, which now values the acquisition at $27.75 per share for Warner Bros. studios and streaming assets, with Discovery’s TV networks set to spin out. This came in response to a competing hostile bid from Paramount Skydance offering $30 per share for all of WBD.

Netflix announced it would suspend stock buybacks while pursuing the deal and expects $275 million in acquisition-related expenses in 2026. The uncertainty has already impacted the stock, which has fallen 20% since the Warner Bros. agreement was unveiled last month.

Seeking Alpha analyst Julian Lin attributed the post-earnings weakness to “a combination of factors, ranging from the stock’s rich valuation heading into the report, management’s guidance for margin expansion to be more back-weighted (raising execution risk), and uncertainty related to the Warner Bros acquisition.” Netflix must now fend off Paramount’s competing bid while persuading U.S. regulators that adding HBO Max won’t stifle competition.

The deal completion timeline of six to nine months, pending Warner Bros. spinning off its cable TV business, creates an extended period of uncertainty that investors appear unwilling to overlook despite solid quarterly results.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.