Netflix needs new growth narrative after stock slide

Netflix’s stock fell about 14% since Feb. 26 and more than 40% over the past 12 months after the company declined to match Paramount Skydance’s $81 billion bid for Warner Bros. Discovery. Shares were up 0.27% on Monday.

By stepping away from the proposed deal, Netflix avoided taking on more than $50 billion in additional debt and received a $2.8 billion breakup fee. Investors have pressed the company for new sources of growth to boost engagement and expand its content advantages.

Netflix has expanded beyond traditional video streaming to increase engagement. The company launched podcasts and expanded gaming. During the FIFA World Cup, users could watch a daily video podcast hosted by Gary Lineker and play FIFA World Cup: Launch Edition. Netflix also tightened rules on password sharing, introduced lower-priced ad-supported plans and raised subscription prices.

Analysts express doubt that podcasts and games will significantly move revenue without stronger intellectual property or larger content hits. Morningstar analyst Matthew Dolgin wrote, “Barring an acquisition, I don’t think there’s a ton to move the needle beyond the core business. To get sentiment as bullish as it was before, they really need to show more acceleration.”

Nielsen data show Alphabet’s YouTube TV increased its share of U.S. streaming time to 28% from 25% over the two years through March 2026, while Netflix’s share fell to 17% from 21% over the same period. Matthew Condon, director of equity research at Citizens JMP, commented, “People are wondering what turns the ship here. There’s not a clear view of what Netflix does next, and that’s why the stock has struggled. Netflix’s share of streaming time is very stagnant. They don’t have a ton of great intellectual property, which was the interesting thing about Warner Bros.”

Questions about mergers and leadership add to investor uncertainty. Rumors have linked Netflix to Lionsgate; the company has denied interest in a deal. Co-founder Reed Hastings recently announced he will step down as chairman. Netflix plans to increase content spending by about 10% in 2026 to pursue another global series comparable to Squid Game or Stranger Things and expects higher content costs as a result.

Netflix trades at a price-to-earnings multiple near 24, roughly in line with the S&P 500 average. Some investors view the valuation as reasonable while others remain focused on whether the company can generate clearer growth drivers or secure larger content assets.