Netflix: Best Days Maybe Behind As Competition Intensifies

Sep 24, 2022, 6:14 AM ETNetflix, Inc. (NFLX) Stock34 Comments
Tech Stock Pros
Investing Group

Summary

  • We are bearish on Netflix as we believe the company's best days are behind it as competition intensifies amidst lofty valuation compared to its peer group.
  • While Netflix is still a household name, we expect subscriber growth to slow as competition from Disney+, Hulu, Apple TV, Amazon Prime, and HBO intensifies.
  • While Netflix will benefit from the launch of the ad-supported service, generating hit content consistently is a daunting task even for the most seasoned entertainment players.
  • Netflix's 1Q22 & 2Q22 reports do not incite much optimism in the company's subscriber growth as Netflix no longer retains its "first mover advantage."
  • We believe Netflix is expensive, trading at 21.3x C2023 P/E basis compared to the pure play peer group average of 13.8x.

Netflix

Wachiwit

Since we first wrote advising investors to sell Netflix (NFLX) shares in February, the stock has been down about 41%. Netflix continues to suffer from multiple problems, including elevated churn, slowing subscriber growth, and increasing competition. Netflix also has to spend heavily

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Tech Stock Pros
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