Netflix Stock Drops as CFO Warns of Soft Margins and Potential Impact of Hollywood Strikes

Netflix stock fell 2% after CFO Spencer Neumann's comments at a conference, where he warned of softer margins and stated that the ad tier is not yet material to overall revenue. Neumann expects operating margins to be in the range of 18% to 20%, below consensus estimates. He emphasized the need to scale the reach of the ad tier and better monetize it. Neumann also expressed concern over the ongoing Hollywood strikes and their impact on the business. Analysts have adjusted their revenue forecasts and lowered ARPU growth expectations. Despite this, Pivotal Research maintained a Buy rating on the stock with a $600 price target.