8/24/2023 0 Comments Netflix stock price forecastThose issues were compounded by Russia’s invasion of Ukraine and the corresponding economic sanctions imposed on Russia. The firm maintained a “neutral” rating on Netflix and slashed its 12-month price target from $350 to $245 per share.įor Netflix, the Q1 results reflected a "perfect storm of domestic market saturation, competition for content, competition for subscribers, inflation and an ill-timed price increase," Wedbush Securities analyst Michael Pachter commented in a research note. Overall, Netflix’s earnings report and discussion “portrayed a company that was more surprised by things and less clear than ever about the path forward,” Nathanson wrote. “We question how easy that would be in a world where everyone wants to take share in the market by spending more on content,” Nathanson observed. The company acknowledged intensifying competition - and told investors it expects to grow share of viewing while decelerating growth in spending on content. Netflix’s disclosure that over 100 million freeloaders (including 30 million in the U.S./Canada) are mooching off someone else’s account “is further evidence that the product has hit maturity in key markets,” MoffettNathanson principal analyst Michael Nathanson wrote in a note. the current great consumer experience and introduces ad volatility to results.” Wlodarczak is bearish on Netflix’s plan to offer a cheaper, ad-supported tier - calling that a net negative, because “we believe it cheapens the brand and the product vs. “The NFLX flywheel has slowed substantially, and it will take time to get it going again, which is likely to create substantial uncertainty around the name for at least the balance of ’22.” The Netflix Q1 report exacerbates investor concerns that “streaming appears nearly fully penetrated globally post-COVID,” the analyst added. “After what can only be called a shocking 1Q subscriber miss and weak subscriber and financial guidance we reduced our subscriber forecasts and pushed back our profitability forecasts substantially,” Wlodarczak wrote in a note to clients. And we’re super focused on achieving those objectives and getting back into our investors’ good graces.”Ĭlick here to sign up for Variety’s free Strictly Business newsletter covering earnings, financial and investment news, and more.Īfter the earnings misfire, Pivotal Research Group analyst Jeff Wlodarczak cut his rating on the stock to from “buy” to “sell” and chopped his 12-month price target by almost 60%, to $235 per share. “But internally, we’re really geared up, and this is like our moment to shine. “I know it’s disappointing for investors, and it is for sure,” Hastings said on Netflix’s Q1 video interview Tuesday. To try to right the ship, Netflix is aiming to convert freeloading password-users into subscribers and to roll out a lower-cost, ad-supported tier over the next two years. Among other factors, co-CEO Reed Hastings blamed the subscriber shrinkage on “great competition” and the company’s estimate that more than 100 million households are streaming the service using a shared password without paying for it.
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