'It's in no man's land': What Wall Street is saying about Netflix's big miss

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Wall Street's patience with Netflix ( NFLX ) appears to be wearing thin.

Netflix shares plunged into the red at the opening bell on Friday as Wall Street digested a lackluster second quarter earnings report . The streaming giant's third-quarter revenue outlook missed expectations, and management offered little to reassure investors about slowing growth and engagement trends.

Analysts said the earnings report did little to ease concerns over Netflix's growth.

"At the moment, it's in no man's land," Bank of America Global Securities senior media analyst Jessica Reif Ehrlich told Yahoo Finance, of the company. "There's just not enough here to move the stock in any direction. There was nothing for the bulls, but there was certainly something for the bears."

One possible catalyst for the stock is an acquisition, Ehrlich told Yahoo Finance. Netflix walked away from a bidding war with Paramount Skydance ( PSKY ) over Warner Bros. Discovery in February. Investors could perceive a new deal that brings fresh IP through the door as a strong move for the streamer.

Ehrlich named NBCUniversal as a possible acquisition target.

In June, Comcast ( CMCSA ) said that the company would be spinning NBCU off into a separate public company — housing Universal Pictures film studio, Peacock streaming platform, and theme parks. The new company is "something that would fit [at Netflix] and would probably help them with growth, given the IP that's involved," Ehrlich said.

Including Friday's sell-off, Netflix shares have lost roughly 46% over the past 12 month as earnings reports and new offerings have failed to flip the script for investors looking for a growth story.

An announcement on Thursday that Netflix will move to publishing its "Watch we Watched" report — which details viewership statistics — only once per year also spooked investors, prompting fears that the company is becoming less transparent about how well its platform is actually engaging and keeping users. The company until now had published the report semiannually.

Until Netflix can find a growth spark, the company will struggle to prove to investors that it can re-gain momentum, Rich Greenfield, TMT analyst at LightShed Partners, said on CNBC Friday morning.

"This is fundamentally investors believing that Netflix has gone ex-growth," Greenfield said. ""Investors right now have no patience for this company."

There is room for upside, William Blair analysts noted. While "sustainable growth has come into question historically," the analysts wrote on Friday, "Netflix has been able to sustain price increases while keeping industry-leading retention."

The company should also be able to capitalize on a series of headwinds including live sports monetization, paid sharing plans, and its scaling ad business, the analysts wrote.

"The company believes it has the right levers to sustain double-digit growth and does not feel compelled to search for a re-acceleration growth lever," they said. "While it may take patience, we believe investors should benefit from accumulating the shares on the pullback while recognizing there is not a near-term catalyst."

Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com .

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