Netflix (NFLX) Stock Price 'Drops' Despite Solid Performance... Enters Support Line Test

▲ Netflix (NFLX), Stock Price Drop/AI Generated Image

Although Netflix (Netflix, NFLX) has secured growth drivers such as advertising and improved profit margins, its stock price has fallen to $78.23, entering a test of its technical support line.

According to FXLeaders on September 15 (local time), Netflix identified advertising, pricing policy, and profitability improvement as key growth drivers ahead of its Q3 earnings announcement on October 15. The media's next performance forecast is for revenue of $12.86 billion, a growth rate of 12%, and an operating profit margin of 33.2%. Recently announced revenue was $12.56 billion, a 13.4% increase year-over-year, with operating profit at $4.19 billion and an operating profit margin of 33.4%.

The advertising business is also growing as a new revenue stream. Netflix projected advertising revenue of approximately $3 billion by 2026. In addition to ad-supported plans, Netflix is expanding programmatic advertising and AI-based advertising, and is also leveraging live content such as NFL, WWE, and MLB as means to increase advertising revenue.

Viewing metrics and cash flow are also strong. Total member viewing hours in the first half of 2026 increased by 2% year-over-year to approximately 97 billion hours. The media expects Netflix to generate $12.5 billion in free cash flow this year. This is evaluated as strengthening its financial foundation, allowing it to concurrently invest in content and advertising technology, and conduct share buybacks.

For the stock price, the resolution of short-term overheating has emerged as a key variable. At the time of writing, Netflix's stock price was $80.33, and its Relative Strength Index (RSI) was around 73, entering an overbought zone. If it broke above $81.01 at that time, $82.25 and $83.59 were suggested as the next resistance levels. Conversely, support levels were suggested in the order of $79.60, $78.82, and $77.31. The current stock price of $78.23 is below the previous two support levels and above the $77.31 support level.

Higher investor expectations, rather than the performance itself, were cited as the biggest burden. FXLeaders analyzed that if advertising, price increases, and viewer engagement do not meet expectations, the stock price could face pressure despite solid performance. Maintaining advertising growth and an operating profit margin above 30% will be key indicators to watch in the October 15 earnings announcement.

[Article Key Summary]

-Netflix continued its trend of improving profitability, with recent revenue increasing by 13.4% and an operating profit margin of 33.4%.

-Advertising revenue is projected to be approximately $3 billion by 2026, with free cash flow expected to be $12.5 billion.

-Netflix's stock price fell to $78.23, dropping below $79.60 and $78.82, with $77.31 presented as the next major support level.

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