How (at least one of) the mighty have fallen these past few months. Investors in Netflix (NASDAQ:NFLX) have experienced a tough stretch, as the company’s share price has lost some 30% of its value since it delivered its Q3 2025 numbers in late October.
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Were things really that bad? With revenues of $11.5 billion representing a 17.2% year-over-year increase, it’s hard to argue that the company is going through a tough spell. Bears could note that Netflix’s operating margin of 28.2% fell short of its guidance of 31.5%, even though the company chalked the miss up to a one-time tax charge paid to the Brazilian authorities.
Of course, another storyline has been swirling around Netflix of late, one that isn’t connected to the company’s recent financial performance. That would be the hullaballoo around the company’s potential acquisition of Warner Bros. Discovery in a deal with a total enterprise value of close to $82.7 billion.
Fears around this acquisition are what’s been pushing down NFLX’s share price, argues top investor Adam Spatacco, and for that reason he’s ready to do something he generally avoids just before the company announces its Q4 2025 earnings this Tuesday.
“This is a rare instance in which I think buying Netflix stock before earnings … could prove wise,” suggests the 5-star investor, who is among the top 2% of stock pros covered by TipRanks.
Spatacco further explains that uncertainty surrounding the potential purchase has changed the narrative surrounding NFLX. Instead of focusing on the company’s “unrelenting growth,” the market has fixated on the bidding war with Paramount, the cost of the transaction, and how the new company will integrate all the new IP content.
It’s for this reason that this investor is prepared to break one of his general rules by trying to time the market. Spatacco argues that investors who focus on long-term investing shouldn’t attempt to find the perfect entry point, which he deems “an exercise in false precision.”
“Given the relative strength of the company’s business performance in combination with its leadership position in the broader streaming realm, I see the current sell-off in Netflix stock as more of an emotional decision driven by fading sentiment rather than an actual issue with the company’s business model,” adds Spatacco.
Moreover, the investor voices his confidence that Netflix will post strong top- and bottom-line numbers when it reports its Q4 earnings. While he’ll be listening for additional information regarding the merger during the call, Spatacco is keeping his gaze on the company’s long-term trajectory.
“When I think about where Netflix could be decades from now, I see the company becoming far more ingrained not only in the streaming environment, but also blossoming into an influential player in merchandising, brand deals, and entertainment,” concludes Spatacco. (To watch Adam Spatacco’s track record, click here)
That’s the spirit throughout much of Wall Street as well. With 26 Buys, 9 Holds, and 2 Sells, NFLX enjoys a Moderate Buy consensus rating. Its 12-month average price target of $127.23 would translate into gains of ~45% in the year ahead. (See NFLX stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.