In a surprising move, Netflix (NFLX) stock took a hit on Friday following the streaming video giant's announcement of lower-than-expected second-quarter revenue projections and a decision to discontinue sharing quarterly subscriber numbers starting in 2025.

During afternoon trades on Friday, Netflix stock dropped by 8.8% to reach $556.66. This decline pushed the stock below its key support level, the 50-day moving average line. The company's first-quarter results were better than anticipated but the revenue outlook for the current quarter fell short.

Netflix, headquartered in Los Gatos, California, defended its decision to no longer disclose quarterly subscriber numbers or average revenue per member, asserting that revenue and operating margin, as well as engagement levels, were now the primary financial metrics for measuring customer satisfaction. The move comes as the company explores the development of new revenue streams such as advertising, emphasizing that subscriptions are just one element of its growth story.

However, Wall Street analysts expressed concerns regarding the reporting change. CFRA Research analyst Kenneth Leon stated it was a mistake and noted that investors and advertisers would still want to know the size of the subscriber base both overall and by region. Despite his reservations, Leon maintained a buy rating but lowered the price target for Netflix stock from $650 to $640.

BofA Securities analyst Jessica Reif Ehrlich attributed the drop in Netflix stock to the lack of visibility into key performance metrics resulting from the reporting change. She also suggested that this change could indicate a potential deceleration in subscriber growth in the future. Despite these concerns, Ehrlich maintained a buy rating for Netflix stock and even raised the price target to $700 from $650.

Bernstein analyst Laurent Yoon viewed the reduced disclosure as a sign of a maturing business for Netflix, similar to other large tech companies such as Apple, Google, and Meta. Yoon reiterated a market perform rating on Netflix stock while raising the price target to $600 from $490.

Evercore ISI analyst Mark Mahaney understood Netflix's reasoning behind the decision but expressed disappointment, labeling it a "chump move" due to reduced disclosure. Mahaney, however, retained an outperform rating on Netflix stock and raised the price target to $650 from $640.

Wedbush Securities analyst Alicia Reese saw Netflix's reporting change as the beginning of a shift from a high-growth, low-profit business to a slow-growth, high-profit model. Reese maintained an outperform rating on Netflix stock, setting a price target of $725.

As the debate regarding the impact of this reporting change continues, only time will tell how investors will digest the new approach.