Netflix Tests New TV App Interface To Stop Users 'Doing Gymnastics With Their Eyes'
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 06 2024
0mins
Should l Buy WBD?
Source: Benzinga
- Netflix Redesigns TV App Home Screen: Netflix is testing a new home screen redesign with larger title cards, automatically playing trailers, and a top-side menu to improve user experience.
- Focus on User Engagement: The redesign aims to help users find content more easily, maximizing user engagement time and potentially increasing revenue for Netflix.
- Slow Rollout of New Interface: The new interface will be gradually rolled out to users starting Thursday after testing and feedback.
- Importance of User Satisfaction: Netflix sees user engagement time as crucial for customer satisfaction and profit, especially as users struggle with indecision in selecting content.
- Stock Performance: Despite the news, Netflix's stock closed 0.25% lower at $648.52 on Thursday.
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Analyst Views on WBD
Wall Street analysts forecast WBD stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for WBD is 24.98 USD with a low forecast of 14.75 USD and a high forecast of 30.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
5 Buy
9 Hold
0 Sell
Moderate Buy
Current: 26.760
Low
14.75
Averages
24.98
High
30.00
Current: 26.760
Low
14.75
Averages
24.98
High
30.00
About WBD
Warner Bros. Discovery, Inc. is a global media and entertainment company that creates and distributes a portfolio of branded content across television, film, streaming and gaming. The Company's segments include Studios, Networks and DTC. Studios segment primarily consists of the production and release of feature films for initial exhibition in theaters, production and initial licensing of television programs to its networks/DTC services as well as third parties, distribution of its films and television programs to various third party and internal television and streaming services, distribution through the home entertainment market, and others. Networks segment primarily consists of its domestic and international television networks. DTC segment primarily consists of its premium pay-TV and streaming services. Its brands and products include Discovery Channel, Max, DC, TNT Sports, Eurosport, HBO, HGTV, Food Network, OWN, Investigation Discovery, TLC, Warner Bros., and Cartoon Network.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Potential ESPN Acquisition: Should the Warner Bros. deal fall through, Netflix may consider acquiring Disney's ESPN, which accounted for only 19% of Disney's $94.4 billion revenue in fiscal 2025, indicating its underperformance and potential as a strategic asset for Netflix.
- Increased Sports Investment: Netflix has begun significant investments in live sports, becoming the exclusive broadcaster of NFL games on Christmas, demonstrating its commitment to content diversification and user engagement, which could enhance customer retention.
- Market Reaction: Since announcing the Warner Bros. acquisition, Netflix's stock has declined, and a pivot to acquiring ESPN could be viewed favorably by the market, potentially improving its content cost structure and enhancing competitiveness.
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- Poor Market Performance: Despite a significant recovery in 2022, Netflix's stock has underperformed the S&P 500 over the past year, losing 11% last month and trading at a 40% discount to its 52-week high, which may dampen investor confidence.
- Strong Financial Growth: In 2025, Netflix reported revenue of $45 billion, a 16% annual increase, with net income nearing $11 billion, up 26%, demonstrating its strong influence in the streaming industry despite rising costs.
- Acquisition Risks: Netflix's all-cash acquisition of Warner Bros. for $82.7 billion could enhance its market position, but with only around $9 billion in liquidity, it may need to dilute its stock or take on significant debt, leading to a pause in share repurchases.
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- Transaction Valuation: Netflix agreed to acquire Warner Bros. at $27.75 per share, valuing the deal at approximately $72 billion, and any blockage could significantly impact Netflix's expansion plans.
- Market Share Concerns: The merger would give Netflix and HBO Max control of about 30% of the U.S. subscription streaming market, a threshold that may trigger stricter antitrust scrutiny, affecting future competitive dynamics.
- Legal Response: Netflix's lawyer stated that the company has not received any separate monopolization investigation notice from the Justice Department, although market concerns about the antitrust risks of the deal may affect investor confidence.
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Impact on Industry: The outcome of this review could significantly influence the media landscape and competition among major entertainment companies.
Regulatory Environment: The current regulatory environment is increasingly scrutinizing mergers and acquisitions, particularly in the media sector.
Market Reactions: Investors and analysts are closely monitoring the situation, as the review's speed and outcome may affect stock prices and market dynamics.
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- Antitrust Investigation: The Justice Department is reviewing Netflix's acquisition proposal for Warner Bros, probing potential anticompetitive behavior that could impact Netflix's market position and future acquisition capabilities.
- Deal Details: The agreement between Netflix and Warner Bros is valued at approximately $82.7 billion, with Netflix offering $27.75 per share, while Paramount's subsequent hostile bid at $30 per share highlights the intense competition in the market.
- DOJ's Concerns: The DOJ's subpoena questions whether Netflix engaged in any other exclusionary conduct that could entrench market power, and if issues are found, it could block the deal, affecting Netflix's expansion plans.
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