{"id":813034,"date":"2026-07-19T23:08:25","date_gmt":"2026-07-19T23:08:25","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/813034\/"},"modified":"2026-07-19T23:08:25","modified_gmt":"2026-07-19T23:08:25","slug":"netflixs-growth-slowdown-exposes-a-classic-shareholder-trap-chart-of-the-day","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/813034\/","title":{"rendered":"Netflix’s growth slowdown exposes a classic shareholder trap: Chart of the Day"},"content":{"rendered":"\n

Netflix (NFLX<\/a>) is still growing. Investors just stopped paying a tech price for it. <\/p>\n

Shares of the streaming giant sank Friday after its third quarter revenue forecast came in below expectations<\/a>, extending a slide that has cut the stock nearly in half since last summer. <\/p>\n

The business did not collapse. The valuation did. <\/p>\n

Netflix’s price-to-earnings (P\/E) ratio<\/a> once topped 70 times expected profits and still stood near 45 times a year ago. It has since fallen to 18.5 times. That drop has pushed the streamer below both the technology and communication services sectors. <\/p>\n

\"Netflix's<\/a> Bloomberg, Yahoo Finance analysis <\/p>\n

A price-to-earnings ratio<\/a> shows how much investors are willing to pay for each dollar of expected profit. <\/p>\n

Netflix’s expected earnings have continued to rise. Investors are simply attaching a lower price to them as revenue growth cools from roughly 16% to 13%. <\/p>\n

That is the shareholder trap. <\/p>\n

A company can keep adding sales and profits while its stock falls because the future no longer looks exceptional enough to support the old price. <\/p>\n

Michael Burry, the investor made famous by his bet against the US housing market before the financial crisis, offered a blunt way to frame Netflix’s problem<\/a>. <\/p>\n

“Disney produces wine. Netflix produces milk,” Burry wrote Friday. <\/p>\n

His argument is that Disney (DIS<\/a>), Pixar, and Warner Bros. (WBD<\/a>) own more evergreen content that can retain or gain value across generations. Netflix must keep replenishing a library whose hits often have a shorter shelf life. <\/p>\n

Great for tonight. Less valuable 10 years from now. <\/p>\n

The more Netflix resembles a media company that must continually replace its product, the harder it becomes to justify a technology-style price. <\/p>\n

Still, Wall Street has not pushed Netflix all the way into the traditional-media bin. The stock trades below Roku (ROKU<\/a>), Spotify (SPOT<\/a>), and the technology sector on expected earnings. It remains above Disney, Fox (FOX<\/a>, FOXA<\/a>), and Comcast (CMCSA<\/a>). <\/p>\n

\"The<\/a> Bloomberg, Yahoo Finance analysis <\/p>\n

Bloomberg Intelligence analyst Geetha Ranganathan said the weaker forecast and unchanged margin outlook “overshadowed an otherwise solid quarter.” <\/p>\n

As earnings season gets underway, Netflix offers an early look at the risk facing richly priced stocks. <\/p>\n

It is a tough neighborhood. Good results can protect the business. Only exceptional results protect a high valuation. <\/p>\n

Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared<\/a> or email him at jaredblikre@yahooinc.com. <\/p>\n

Click here for in-depth analysis of the latest stock market news and events moving stock prices<\/a> <\/p>\n

Read the latest financial and business news from Yahoo Finance<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"Netflix (NFLX) is still growing. Investors just stopped paying a tech price for it. Shares of the streaming…\n","protected":false},"author":2,"featured_media":813035,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[4536,45,49,48,127175,1316],"class_list":["post-813034","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-bloomberg","tag-business","tag-ca","tag-canada","tag-michael-burry","tag-netflix"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/813034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=813034"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/813034\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/813035"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=813034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=813034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=813034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}