Netflix down 10.5%, most in a year after sub miss

|About: Netflix, Inc. (NFLX)|By:, SA News Editor

Netflix (NASDAQ:NFLX) is down 10.5% following a painful subscriber miss, its worst decline in a year taking billions off the market cap.

It's breaking to the downside out of a trading range it's been in all year, currently at $324.44.

Management largely pointed to the company's current content lineup as a fault for a subscriber add count that came in at 2.7M vs. a forecast of 5M, though it did acknowledge the wave of upcoming competition (with major streaming services on the way from Disney, AT&T and Comcast).

On the Street, negativity reigns at least in the short term, as Notable Calls points to a Tier 1 desk saying "bears and even the bulls seem to find negativity in almost every single data point from the print ... Investors believe any attempt for NFLX to grind higher will result in it getting sold."

But long-term sentiment still looks resilient. Guggenheim is sticking with a Buy rating, pointing to talk about strong scalable, globalized content and profitability that's improving, along with a bull's focus on longer-term subscriber penetration. It has a $420 price target, now implying 29.5% upside.

Piper Jaffray's still at Overweight and has a $440 target (35.6% upside). It's sanguine about new competition in particular, noting despite an "onslaught" that "we expect Nextflix to continue to capture a significant portion of traditional content dollars."

Seeking Alpha authors are Neutral on average, and Netflix has a Quant Rating of Neutral.

Earnings call transcript

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This was corrected on 07/18/2019 at 11:20 AM. The original item had an incorrect price target from Piper Jaffray.