Netflix stock just flashed multiple crash signals

Published: Saturday, October 25, 2025 at 4:38 pm

Netflix Stock Flashes Warning Signs, Signaling Potential Downturn

Netflix shares are exhibiting concerning technical patterns, raising alarms among investors. The stock has recently closed below all key moving averages, including the 20-day, 50-day, 100-day, and 200-day, a development that often precedes a sustained decline. This marks a significant shift, as the stock has decisively fallen below its 200-day simple moving average (SMA) for the first time since its long-term uptrend began.

The stock has experienced a sharp downturn, dropping nearly 10% in the past week, although it remains up 23% year-to-date. Momentum indicators are also signaling caution. The Relative Strength Index (RSI) is hovering near oversold levels, indicating accelerating bearish momentum. Rising selling volume near support suggests institutional investors may be reducing their holdings.

The current bearish sentiment comes despite positive revenue and earnings guidance from the company. However, investors are focusing on a weaker-than-expected operating margin and valuation concerns. In the most recent quarter, Netflix reported a 28% operating margin, below its projected 31.5%, due to an unexpected tax expense in Brazil. While the company stated this issue would not impact future results, it did lower its 2025 margin outlook.

Furthermore, Netflix faces uncertainty due to increasing competition from AI-driven content platforms and renewed criticism over content. Despite strong ad sales and popular titles, investors remain cautious about the company's profitability and valuation as it heads into 2025.

BNN's Perspective: While the technical indicators and recent performance of Netflix are concerning, it's important to remember that the stock is still up significantly year-to-date. The company's strong revenue and earnings guidance suggest underlying strength. However, the market's reaction to the operating margin and the broader competitive landscape warrant careful monitoring. Investors should consider the potential for further volatility and assess their risk tolerance accordingly.

Keywords: Netflix, NFLX, stock, market, shares, moving averages, bearish, RSI, operating margin, revenue, earnings, valuation, competition, AI, streaming, investment, financial news

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