Zacks Investment Ideas feature highlights: Netflix, Disney, Amazon and Paramount Global

For Immediate Release

Chicago, IL – July 21, 2025 – Today, Zacks Investment Ideas feature highlights Netflix NFLX, Disney DIS, Amazon AMZN and Paramount Global PARA.

Buy, Hold or Take Profits in Netflix After Q2 Earnings Report?

Investors appear to be a bit underwhelmed by Netflix’s Q2 report, despite the streaming king posting favorable quarterly results after market hours on Thursday.

Down 5% in this morning's trading session, some profit taking may also be attributing to the post-earnings dip in Netflix stock as NFLX is still up more than +30% year to date and is sitting on monstrous gains of nearly +500% in the last three years.

This makes it a worthy topic of whether it's time to get in on the profit taking, buy the post-earnings dip, or hold Netflix stock.

Netflix’s Favorable Q2 Results

Exceeding earnings expectations, Netflix’s Q2 net income came in at $3.13 billion or $7.19 per share and above the Zacks EPS Consensus of $7.07. Year over year, Netflix’s Q2 EPS spiked 47% from $4.88 in Q2 2024. This came on Q2 sales of $11.07 billion, which increased 16% from the comparative quarter but slightly missed estimates of $11.08 billion.

Notably, Netflix’s operating margin during Q2 was 34.1%, up from 24% a year ago, with free cash flow soaring 91% to $2.3 billion.

Netflix’s Q2 Subscriber Growth

Although Netflix no longer reports official quarterly subscriber numbers, the streaming giant is thought to have added 5.1 million new net subscribers during Q2. However, this fell below many analysts' forecast of 6 million and was down from 8.05 million new net subscribers in Q2 2024.

Still, Netflix’s total subscribers have risen to over 300 million thanks to its global reach, strong content pipeline, and the growth of its more affordable ad-tier, keeping the company firmly ahead ofDisney’s streaming services and other platforms such as Amazon’s Prime Video and Paramount Global.

Netflix's Revenue Guidance & Margin Outlook

Optimistically, Netflix raised its full-year 2025 revenue guidance to $44.8-$45.2 billion from its previous forecast of $43.5-$44.5 billion. The current Zacks Consensus calls for Netflix’s top line to expand 14% this year to $44.55 billion, with fiscal 2026 sales projected to increase another 12% to $50.05 billion.

It’s also noteworthy that Netflix slightly increased its full-year operating margin guidance from 29% to 29.5%, although many analysts were looking for a margin range between 30-31%.

Monitoring Netflix’s P/E Valuation

What may have dampened excitement for Netflix’s favorable Q2 report is that at 50X forward earnings, NFLX does trade at a noticeable premium to the broader market, with the S&P 500 at 24X. This is also well above Disney and Paramount at 21X and 9X forward earnings, respectively, and even Amazon at 35X.

Bottom Line

For now, Netflix stock lands a Zacks Rank #3 (Hold). Enthusiasm for Netflix’s growth expectations appears to be already priced into its stock, as investors may have been looking for more exceptional upside surprises in its Q2 results.

That said, holding NFLX in the portfolio is still worthwhile considering Netflix’s market dominance, as more than 20% EPS growth is in the forecast for FY25 and FY26, and should help the streaming king grow into its somewhat stretched P/E valuation.

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