Netflix Is Down 38% Since Completing Its 10-For-1 Stock Split. Here's Why the Sell-Off Is Worsening After Its Latest Earnings.

Netflix (NFLX) has shed 37.9% since completing its 10-for-1 stock split in November 2025, and the slide extended after its Q3 2026 earnings report.

The headline numbers were not the problem. Revenue grew 11.8% and operating margins improved. The trigger was guidance: NFLX cut its full-year ad revenue outlook by 10%, citing a slower rollout of its ad products.

The sell-off also reflects three concerns tied to the report. Investors are worried about slowing growth, competition from mobile-focused platforms like YouTube and TikTok, and the effect of recent price increases on price-sensitive subscribers.

The balance sheet offers some cushion. NFLX holds $8.19 billion in cash and trades at roughly 17x forward earnings. Interpretation: after a 37.9% drawdown, the multiple suggests the market is pricing in a growth slowdown, while the cash position limits near-term financial risk.

The guidance cut matters because advertising was a growth lever management was counting on. A 10% reduction to the full-year ad target signals execution risk rather than a demand collapse, since core revenue growth held at 11.8%. Whether that distinction holds will determine if the stock stabilizes or keeps sliding.