01:59 PM EDT, 10/22/2025 (MT Newswires) -- Netflix's ( NFLX ) core fundamentals likely remain intact even as the streaming giant didn't offer a financial outlook for 2026, while its third-quarter results were solid besides a tax expense that drove an earnings miss, BofA Securities said in a Wednesday note.

Shares of the streaming giant plunged 10% intraday, a day after the company reported a quarterly profit that trailed Wall Street's estimates due to a tax expense related to an ongoing dispute with Brazilian authorities. The tax matter is not expected to have a material impact on Netflix's ( NFLX ) results going forward, the company said late Tuesday.

"Netflix ( NFLX ) reported a solid (third quarter) which was headlined by a one-time catch-up Brazilian tax charge, which drove the operating income miss (versus) our expectation," BofA analyst Jessica Reif Ehrlich wrote.

Unlike last year, when it issued a 2025 outlook along with its third-quarter results, the company this time opted not to provide a guidance for next year.

"This does not appear to signal any noticeable change in underlying fundamentals as advertising is expected to more than double in 2025, engagement growth picked up in (the third quarter) and the pricing environment is constructive on the heels of several price increases from competitors," Ehrlich said.

On the earnings call late Tuesday, co-Chief Executive Greg Peters described the business as still "very healthy" and co-CEO Ted Sarandos said he sees "enormous room" for profitable growth in the core business."

"I would just say, looking ahead, we continue to have a massive opportunity since we're only about 7% of the addressable market in terms of consumer spending and only about 10% of time spent on TV in our biggest market," Sarandos said, according to a FactSet transcript.

Netflix ( NFLX ) expects 2025 revenue of $45.1 billion, compared with the prior outlook that called for $44.8 billion to $45.2 billion. The FactSet-polled consensus estimate is for $45.07 billion.

The company, which is rumored to be among parties interested in acquiring Warner Bros. Discovery ( WBD ) , didn't rule out merger and acquisition prospects, but said that it is not interested in legacy media networks.

Netflix ( NFLX ) management suggested on the call that the company could still be interested in buying intellectual property that strengthens its entertainment offerings and existing capabilities.

Warner Bros. said on Tuesday that the media and entertainment giant is open to a potential sale as it initiated a review of strategic alternatives after receiving interest from "multiple parties."

BofA's Ehrlich said Warner Bros.'s IP and library matched with Netflix's ( NFLX ) distribution would be "a strong combination."

The brokerage reiterated a buy recommendation on Netflix's ( NFLX ) stock and maintained its price target at $1,490.

Price: 1114.07, Change: -127.28, Percent Change: -10.25