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Netflix (NFLX) shares are on track for a fifth straight weekly loss after co-CEO Ted Sarandos said growth is lagging, leaving the stock down about 25% in 2026.
- Netflix is set for a fifth consecutive weekly decline; shares fell 14% in September and are down about 25% this year.
- Sarandos said the company is "not growing as fast as I want us to," and that some of its own choices create headwinds.
- First-half viewing hours rose just 2%, and the next earnings report is due later this month.
Lead
Netflix (NASDAQ: NFLX) is heading for a fifth straight weekly decline after co-CEO Ted Sarandos told Bloomberg's Screentime conference in Los Angeles on Thursday that "overall, we're not growing as fast as I want us to, and we're working on making that move faster." Shares slid about 2% in midday trading on October 1 to roughly $67.91. They have fallen about 18% over the past month and about 25% year to date.What Did Sarandos Say About Growth?
Sarandos conceded that Netflix's growth is below his expectations, and he added that the company is "doing things that create a lot of headwind to that number." The remarks were unusually blunt for a company that has spent much of the past three years as a market favorite.
He pointed to live programming as part of the strategy. Live events take roughly 5% of Netflix's annual content budget of about $20 billion but deliver only about 1% of total viewership. The company argues the format earns its place through other channels: live events drive sign-ups, reduce churn and appeal to advertisers.
Why Is Netflix Stock Falling?
Netflix stock is falling because engagement and revenue guidance have both softened. Viewing hours rose only 2% in the first half of 2026, and viewing of its Top 10 originals declined 4%.
The July earnings report set the tone. Second-quarter revenue rose 13% to $12.56 billion, operating income rose 11% to $4.2 billion, and operating margin came in at 33.4% against 34.1% a year earlier. Third-quarter guidance then disappointed: revenue of $12.86 billion and earnings per share of $0.82 fell short of consensus estimates of $13 billion and $0.84. The shares dropped about 8% on the day, and they have not recovered.
Strategic Context
The slowdown comes as Netflix leans on pricing and advertising rather than pure subscriber gains. The company reaffirmed 2026 revenue guidance of $50.7 billion to $51.7 billion, or 12% to 14% growth, and a full-year operating margin target of 31.5%, up from 29.5% in 2025. Advertising revenue remains on track to reach roughly $3 billion this year, about double the 2025 level.
That mix makes engagement the key variable. Advertisers pay for attention, and price increases are easier to sustain when viewing time is growing. A flat or declining share of viewing on top originals puts pressure on both.
What Comes Next for Netflix Shares?
Netflix's next test is its third-quarter earnings report, expected around the third week of October. The market will focus on three things: whether revenue growth lands near the 12% guided for the quarter, whether the 33.2% operating margin target holds, and what management says about engagement trends and the content slate heading into the holiday period.
The stock trades near $70, about 40% below its level a year ago. Valuation has compressed alongside the growth reset. Sarandos's comments have shifted the debate from whether growth is slowing to what the company can do about it. They also suggest management expects the quarter to show continued moderation.
Outlook
Netflix enters earnings season with its shares near multi-month lows, a fifth weekly loss in sight and a co-CEO on record that growth is short of target. Full-year guidance for revenue, margin and advertising is intact. The central question for the quarter is whether engagement and ad momentum can offset slower organic viewing growth.
Mentioned tickers: NFLX
