Netflix Stock: Buy or Sell After CPO Exit Triggers Sell-Off?

Netflix's streaming empire faces fresh turbulence as Chief Product Officer Eunice Kim departs on 10 September 2025, sparking investor jitters amid soaring stock highs and robust 2025 subscriber gains. With shares closing at £775 ($1,188) on 12 September 2025 after a 1.25% drop, analysts debate whether this leadership shake-up signals a buy opportunity in the ad-tier boom or a sell trigger for overvalued shares.

As Netflix navigates 301.6 million global subscribers and £7.22 billion ($11.08 billion) Q2 revenue, stakeholders weigh long-term growth against short-term uncertainty in the competitive streaming landscape.

Eunice Kim's Departure Shakes Netflix's Product Strategy in 2025

Eunice Kim, Netflix's Chief Product Officer since 2023, announced her exit on 10 September 2025 after five years driving key innovations. She spearheaded the password-sharing crackdown, ad-supported tier launch, and a redesigned TV interface rolled out in May 2025, enhancing user experience for over 300 million members.

Chief Technology Officer Elizabeth Stone steps in as interim CPO, with Netflix vowing a swift replacement search. This move arrives amid Netflix's pivot to live events and gaming, but insiders note it could disrupt momentum.

X post from Wall St Engine highlights: 'Kim led major initiatives like the password-sharing crackdown and the new TV interface for 300M+ users.' Observers question if the transition hampers ad tech rollout, vital for doubling advertising revenue in 2025.

Stock Plunges 4.5% Weekly Amid CPO Exit and Market Fears

Netflix shares tumbled 4.5% in the week ending 12 September 2025, erasing £34 ($52) per share, following Kim's announcement. The stock, up 39% year-to-date to £775 ($1,188), now trades 33.4% above its discounted cash flow fair value of £581 ($891), per September 2025 analysis.

Elevated volume hit 1.45 times average on 10 September, with 3.13 million shares traded, fuelling a 3.58% intraday sell-off. Broader pressures include rising content costs and competition from Disney and Amazon, squeezing margins despite 16% Q2 revenue growth to £7.22 billion ($11.08 billion).

Free cash flow surged 91% to £1.50 billion ($2.3 billion) in Q2, yet analysts flag execution risks in global expansion. This dip tests support at £774 ($1,186), with potential for further volatility if interim leadership falters.

Q2 2025 Surge Delivers 301.6 Million Subscribers and Revenue Records

Netflix hit 301.6 million paid subscribers by August 2025, fuelling 16% year-over-year revenue growth to £7.22 billion ($11.08 billion) in Q2 ended 30 June 2025. Earnings per share reached £4.69 ($7.19), beating forecasts by 4%, driven by higher pricing and ad-tier uptake—nearly half of new US sign-ups chose ads from January to May.

Operating margin climbed to 34.1%, up 7 points year-on-year, with net income at £2.04 billion ($3.125 billion). The company raised full-year 2025 revenue guidance to £29.20 billion ($44.8 billion) to £29.46 billion ($45.2 billion), eyeing 14% growth from ad revenue doubling and international pushes.

Users streamed over 95 billion hours of content in Q2, underscoring engagement. Yet, Netflix halted quarterly subscriber reports post-Q1, shifting focus to financials amid steady gains.

Analysts Split: Buy for Growth or Sell on Overvaluation Risks?

Wall Street's consensus tilts 'Buy' on Netflix, with 30 analysts averaging a £1,000 ($1,534) 12-month target—29% upside from £775 ($1,188)—and 24 buys against one sell. Bullish voices praise ad tech and consolidation: 'Analysts believe global ad tech rollout and international expansion will fuel long-term subscriber and revenue growth,' targeting £880 ($1,350) fair value at 12.5% growth.

Bears urge caution, citing a 49.3x P/E ratio versus the 36.4x fair ratio and industry 35.6x average, implying overvaluation. One forecast eyes £798 ($1,223) amid 13% growth but margin pressures from content amortisation.

With free cash flow projected at £13.96 billion ($21.43 billion) by 2029, long-term bulls dominate, but CPO uncertainty prompts holds. Investors should monitor Q3 results on 15 October 2025 for clarity.