Netflix Inc (NASDAQ:NFLX, XETRA:NFC)'s fourth quarter and full-year 2025 results drew a generally positive response from analysts at Wedbush and UBS, who pointed to solid execution and accelerating advertising momentum, tempered by softer near-term guidance and higher investment levels.
Following the report, shares of Netflix traded down 2.3% at about $85 on Wednesday afternoon.
Wedbush believes the market reaction reflects elevated expectations following prior strong results, but argued that Netflix’s long-term advertising opportunity remains intact.
“Shares are again under pressure after a second underwhelming quarter, as investors have become accustomed to phenomenal results,” they wrote. “Still, we think Netflix is positioning for substantial growth in global advertising, and that should not be overlooked,” the analysts added, citing expanded partnerships, improved targeting, greater use of AI, and more live content.
Wedbush noted advertising revenue reached roughly $1.5 billion in 2025, about 2.5 times higher than 2024, with management guiding to a doubling to $3 billion in 2026.
“Despite the near-term drag, we remain positive on Netflix’s overall opportunity to expand advertising in 2026,” the analysts added, reiterating an ‘Outperform’ rating and a $115 price target.
For Q4, Wedbush highlighted revenue growth of 18% year-over-year to $12.051 billion and operating income of $2.957 billion, both above consensus and guidance. Full-year 2025 operating margin of 29.5% exceeded guidance, while free cash flow of $9.5 billion also topped the company’s outlook.
However, Wedbush described Netflix’s initial 2026 guidance as underwhelming, pointing to a projected slowdown in the first quarter tied to fewer advertising opportunities and slower subscriber additions.
UBS also highlighted that Netflix’s Q4 results were ahead of expectations, while guidance was more mixed. The firm noted 2026 guidance for 12% to 14% revenue growth and 31.5% operating margins, reflecting increased investment in live content, licensing, and other initiatives.
“Warner Bros deal uncertainty has weighed on shares but we still believe Netflix looks well positioned, deal or no deal, and expect sentiment to improve as Netflix's growth prospects, monetization opportunity and competitive moat come back into focus,” UBS wrote.
They maintained a ‘Buy’ rating while lowering their price target to $130 from $150.