Netflix (NFLX) recently announced the acquisition of Warner Bros. Discovery (WBD) film and television studios in a massive $82.7 billion cash-and-stock deal. But instead of celebrating, many shareholders are on edge. The hefty price tag, potential integration challenges, and regulatory hurdles have all sparked concern. Even so, NFLX stock is trading up by 0.99% in pre-market trading on Monday.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
The talks and bidding process lasted several weeks before the deal was recently announced, pending regulatory approval. However, Paramount (PSKY), which was also in the running, claims Warner Bros. gave Netflix an unfair advantage in the sale process.
Is Netflix Paying Too Much for Warner Bros?
While the deal would give Netflix a massive content library and much more scale, investors are worried about the huge price tag of over $80 billion (equity value $72 billion). That concern grows when you consider that Warner Bros. Discovery was valued at just over $30 billion in early September before buyout rumors started.
On top of that, most of the deal price will be paid in cash, which is a major commitment for a company. As of September 2025, Netflix reported operating cash flow of $9.57 billion. Below is a screenshot showing Netflix’s cash flow over the last few years.
More Concerns for Investors
The price isn’t the only concern for investors. Netflix has said it plans to keep operating the parts of Warner Bros. it is buying. That means Netflix would shift from being a pure streaming service to becoming a full-scale Hollywood studio, making movies for theaters and TV shows for outside networks.
For context, WBD announced in June 2025 that it would split its Streaming & Studios division and its Global Networks division into two separate public companies. That breakup is expected to finish in Q3 2026, just before the Netflix deal closes.
On top of everything else, the deal is expected to face tough regulatory scrutiny. Approval is far from guaranteed, as regulators may object over concerns about market power and industry consolidation. The acquisition is already drawing opposition from multiple sides — including Paramount, theater owners’ groups, film producers, and even members of Congress.
All these uncertainties are understandably making Netflix investors nervous.
Is Netflix Stock a Buy?
Turning to Wall Street, NFLX stock carries a Moderate Buy consensus rating based on 28 Buys, seven Holds, and two Sells assigned in the last three months. The average NFLX stock price target is $137.65, pointing to a 37.32% upside from the current price.
Year-to-date, NFLX stock has gained 12.5%.
