Netflix shares slip after Benchmark downgrade

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Netflix ($NASDAQ:NFLX) shares slipped on Tuesday as investment firm Benchmark downgraded the streaming giant, citing concerns over the ability to grow subscribers, foreign exchange headwinds and negative press. Analyst Matthew Harrigan lowered the rating on Netflix shares to sell from hold and cut the price target to $157, noting that the company’s recent price increases could hurt subscriber growth. Do you think this will affect NETFLIX market and earnings in the long term? It is yet to be seen how much this downgrade will affect Netflix in the long term. However, it is worth noting that the company has faced challenges in the past and has been able to come out on top. For example, Netflix was able to successfully navigate the transition from DVDs to streaming, and they have consistently been one of the top performing companies in terms of customer satisfaction. In addition, Netflix has been able to grow its international subscriber base despite strong competition from local streaming services. That said, the concerns raised by Benchmark are not to be ignored. The streaming landscape is becoming increasingly competitive, and it remains to be seen if Netflix will be able to maintain its position as a top player. In addition, the company is facing headwinds in terms of foreign exchange rates and negative press. It will be interesting to see how Netflix navigates these challenges in the coming months.

Market Reaction

On Tuesday, NETFLIX stock opened at $169.8 and closed at $167.5, down by 1.3% from the previous day’s closing price of 169.7. This was in line with the overall trend for the day, as most stocks were down slightly.

VI Analysis

Company’s fundamentals reflect its long term potential, below analysis on NETFLIX are made simple by VI app. The VI Star Chart shows that NETFLIX is strong in profit, growth, and weak in asset, dividend. NETFLIX has an intermediate health score of 4/10 with regard to its cashflows and debt, is likely to sustain future operations in times of crisis. NETFLIX is classified as ‘gorilla’, a type of company that achieved stable and high revenue or earning growth due to its strong competitive advantage. At the right price, it is suitable for those who wants to invest for high capital gains. High growth companies are deemed more risky as they attempt to grow faster.

Summary

Netflix shares fell after Benchmark analyst, Daniel Kurnos, downgraded the stock from buy to hold, citing mixed news around the company’s recent price hike and new content offerings. The stock price fell 1.3% the following day. Kurnos predicts that Netflix will struggle to add new subscribers in the near term and that the company’s stock price will remain volatile.