• 101 days Could Crypto Overtake Traditional Investment?
  • 106 days Americans Still Quitting Jobs At Record Pace
  • 108 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 111 days Is The Dollar Too Strong?
  • 111 days Big Tech Disappoints Investors on Earnings Calls
  • 112 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 114 days China Is Quietly Trying To Distance Itself From Russia
  • 114 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 118 days Crypto Investors Won Big In 2021
  • 118 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 119 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 121 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 122 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 125 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 126 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 126 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 128 days Are NFTs About To Take Over Gaming?
  • 129 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 132 days What’s Causing Inflation In The United States?
  • 133 days Intel Joins Russian Exodus as Chip Shortage Digs In
  1. Home
  2. Investing
  3. Stocks

Is There Any Reason To Be Bullish About Netflix?

Bullish About Netflix

Netflix stock is down 30 percent from its high, and earnings are about to come out. Whether this is a buy or not comes down to what analysts think of a no-holds-barred streaming war with some fierce competition.

Netflix’ FAANG days are rather lackluster of late. It’s been outshined by Facebook, Apple, Amazon and Google for a year now.

True, in late September, all FAANG stocks plummeted, losing some $58 billion after Trump went on an anti-tech rampage about too much power for tech. But taken as a whole, FAANG stocks have seen a $629-billion rise so far this year.

Netflix, though, has been the dimmest star in this universe.

In mid-July, it failed to impress with Q2 earnings. The numbers were worse than expected and the stock moved into definitive bear territory on data showing that a short-fall it new subscriber estimates, and on the premise that growth outlook is shrinking amid a sea of competition.

Over the past 52 weeks, Netflix is down around 22 percent.

(Click to enlarge)

On October 16, Netflix is due to report its Q3 earnings, and the bears as certainly not convinced that it will be anything to write home about. While Netflix has given us strong Q3 guidance, meeting that might not be enough to move the share price. Netflix has forecast up to 750,000 paid subscriber additions in the third quarter.

What’s worse: The competition is about to get even stiffer. Related: SoftBank Reeling After Questionable WeWork Investment

Apple is hitting the original programming hard for its upcoming Apple TV+ streaming service, which will launch on November 1st.

This is war, make no mistake, and so far, Netflix isn’t armored up enough. There aren’t any more friendly partnerships. Everyone’s an enemy.

Disney has now banned Netflix as streaming becomes the solid front line for entertainment. Apple and Disney are bringing in the tanks.

The bears think Netflix has met its match with Disney, first and foremost, and in combination with Apple, even more so.

Evercore ISI analyst Vijay Jayan has slashed his price target on NFLX shares to $300 from $380, saying that investors are jittery about the business model in the face of growing competition over the coming months, MarketWatch reported.

But not everyone is ready to throw the towel in for Netflix when it comes to the streaming throne. Some think the bull case still remains intact. Keep in mind that Netflix has a huge lead in subscribers and tons of programming so it’s still very much in this game. Domestically, it boasts some 60 million subscribers, and 91.5 million internationally.

Bernstein analyst Todd Juenger says that the narrative has shifted now and Netflix is no longer untouchable, largely thanks to Disney. But he also sees a “false dichotomy”.

“Disney+ should not hurt Netflix,” Barrons quoted him as saying. “It is not a substitute, it is a complement… these are at least independent products, possibly even complementary products. But definitely not an ‘either/or’ decision for a consumer.”

With that in mind, Juenger is the odd man out, reiterating an ‘outperform’ rating and $450 price target on Netflix. Even if Disney+ is getting all the headlines, Netflix still has legs to lift its stock with more original shows and a bigger international audiences.  

In other words, Netflix might have lost its FAANG, but it hasn’t lost its throne—yet, even if competition means it’s going to have to work a lot harder to keep it.

By Michael Kern for Safehaven.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment