Netflix can deliver more revenue, earn substantially more profit, and still leave investors reaching for the remote. That is the strange position the streaming giant finds itself in after a brutal stock decline wiped out nearly $200 billion in market value. The company isn’t suddenly struggling to sell subscriptions, either. Instead, investors have started questioning whether Netflix can keep growing fast enough to justify the lofty expectations attached to its stock.
That makes this more than another story about a disappointing earnings report. Netflix has built a powerful entertainment business, but Wall Street now wants evidence that its next phase can deliver the same excitement as its last. Whether the sell-off represents an overreaction depends on which part of the business investors believe deserves their attention.
