Can Upcoming Global Content Drive NFLX's Engagement in the Near Term?

Netflix NFLX is gearing up for a strong holiday quarter, betting that its upcoming global content slate will drive deeper viewer engagement and sustain recent momentum. With third-quarter viewing hours rising faster than in the first half of 2025, the stage is set for a near-term engagement push.

Netflix’s fourth-quarter strategy blends blockbuster global titles, regional originals and live programming — an approach aimed at broadening audience reach and elevating engagement. Returning franchises such as Stranger Things (final season), Emily in Paris (Season 5) and The Diplomat (Season 3) are expected to draw loyal fan bases, while new international titles like India’s Single Papa, Italy’s The Monster of Florence and Norway’s Troll 2 expand the company’s global footprint.

The platform is also leaning into live programming, with the NFL Christmas Day games and the Jake Paul vs. Gervonta “Tank” Davis fight positioned as high-engagement events. These are complemented by Kids and Family offerings, which include Sesame Street, In Your Dreams and a new season of Gabby's Dollhouse.

Looking ahead, Netflix expects 2025 revenues of $45.1 billion, up 16% year over year, driven by ad growth, pricing gains and rising viewership. Recent performance already validates this trajectory, with the company achieving record TV view share in the third quarter of 2025, up 15% in the United States and 22% in the U.K. since the fourth quarter of 2022 (based on Nielsen and BARB data).

However, Netflix’s rising content costs pose a key challenge. The company holds $20.9 billion in streaming content obligations, reflecting heavy investment across over 50 countries. To offset these costs, the company must ensure its new global lineup drives strong engagement and steady returns.

How Rivals Challenge NFLX in the Global Content Race

Walt Disney DIS remains a major rival to Netflix in the global content race, leveraging its rich library of family-friendly franchises. Looking ahead, Walt Disney’s upcoming content slate underscores its aggressive push to match Netflix’s global content scale, featuring major theatrical releases such as Zootopia 2, Avatar: Fire and Ash, Fire and Water: Making the Avatar Films, Prep & Landing: The Snowball Protocol and Marvel’s Wonder Man. This mix of blockbuster films, new animated titles and streaming series highlights Walt Disney’s strategy to compete with Netflix’s dominance in global content creation and subscriber engagement.

Warner Bros. Discovery WBD is intensifying its push to challenge Netflix in the global content race. Backed by a powerhouse portfolio that includes HBO, Warner Bros. Pictures and Discovery Channel, WBD is broadening its global reach through fresh, diverse storytelling. Its upcoming slate — I Love LA, The Seduction, Wuthering Heights, The Cat in the Hat, The Bride, Alex vs Arod and Thoughts & Prayers — highlights WBD’s ambition to captivate audiences worldwide with premium entertainment.

NFLX’s Price Performance, Valuation & Estimates

Shares of Netflix have gained 23.7% year to date compared with the Zacks Broadcast Radio and Television industry’s rise of 22.7% and the Zacks Consumer Discretionary sector’s return of 5.8%.

NFLX’s YTD Price Performance

From a valuation standpoint, Netflix appears overvalued, trading at a forward 12-month price-to-earnings ratio of 35.67, higher than the industry's 28.6X. NFLX carries a Value Score of D.

NFLX’s Valuation

The Zacks Consensus Estimate for NFLX’s 2025 earnings is pegged at $25.43 per share, down by 2.5% over the past 30 days. This indicates a 28.24% increase from the previous year.

NFLX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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