Why Netflix Stock Plunged 11% in October

NFLX fell 10.8% in October as investors weighed slowing user engagement and decelerating revenue growth, according to the source analysis.

The company cut 6% of its workforce and made content leadership changes. It also trimmed its 2026 ad revenue forecast from $3 billion to $2.7 billion, a $300 million reduction, or 10% below the prior target. The ad cut gives bears a concrete number to anchor on, since advertising has been framed as a growth lever.

The bull case rests on three points from the same analysis. NFLX still posts solid revenue and profit growth, trades below 19x earnings, and carries a strong track record of producing hit content.

Interpretation: the selloff reads as a growth-multiple reset rather than an earnings collapse. A sub-19x multiple alongside continued profit growth suggests the market is pricing in further deceleration, while the lowered ad forecast and engagement worries supply the justification. The layoffs and leadership shake-up could be read either as cost discipline or as a signal that management sees pressure in content performance. The data supports both readings.