Entering the Jan. 23 trading session, Netflix, Inc. (NFLX) was a on six-session skid – one contributing to a year-to-date loss of more than 8%.
The bulk of the streaming entertainment giant’s woes come from its $72 billion bid for Warner Bros. Discovery, which has turned into a bidding for with Paramount Skydance (PSKY). For now, it appears as though Netflix will emerge victorious in procuring WBD’s film studio and HBO Max streaming assets.
When the dust settles on that contentious transaction, it’s possible Netflix stock rebounds and that could open the door to opportunity with the Direxion Daily NFLX Bull 2X Shares (NFXL) – an ETF designed to deliver 200% of the daily performance of the stock.
What NFXL Traders Need to Go Right
Even when it’s not trying execute massive acquisitions, Netflix generates ample news flow. This indicates aggressive traders have reason to actively monitor NFXL. However, given the scope of a $72 billion deal, the WBD buy is likely to give traders reason to assess NFXL in the months ahead. Translation: If Netflix can show it’s digesting that purchase with limited disruption while identifying cost synergies, the Direxion ETF could catch a bid.
Beyond that acquisition, there are areas of execution in which Netflix management can show investors things are looking. Those include international subscriber growth, which some analysts say hasn’t been sturdy enough of late. Analysts expect overall revenue growth to be 11% to 13% this year.
For the fourth quarter “we estimate international sales growth was only 14% in each of the last two quarters. We suspect the vast majority of roughly 25 million new members in 2025 were in international markets,” observed Morningstar analyst Matthew Dolgin.
Dolgin points out that Netflix is expected to generate cash flow of $11 billion this year. In theory, that’s an impressive sum, but the stock’s recent price action suggests investors wanted more. From that, one can infer that if the company is able to show pathways to better-than-expected 2026 cash flow, the stock and NFXL could command upside.
“With some costs, including the Brazilian tax issue the firm reported last quarter, getting pushed to 2026 from 2025, we don’t think cash flow and margin guidance are as disappointing as the market may have initially taken them,” said Dolgin in a report.
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