Netflix seen having 'isolated' negative effect from suspending business in Russia

stockcam/iStock Unreleased via Getty Images

Netflix (NASDAQ:NFLX) last week joined the growing number of American tech giants that have suspended operations in Russia due to its invasion of Ukraine. And while the move may have some impact on the streaming TV giant's stock, it is not likely to be a major blow to Netflix's (NFLX) overall business.

That's the opinion of Benchmark analyst Matthew Harrigan, who said in a research note Monday that there is "a clear crisis fallout" that could affect Netflix's (NFLX) stock valuation and international growth numbers, but its Russian subscriber base is paltry compared to other countries and regions.

"The isolated financial effect is minimal," Harrigan said, noting that "less than an estimated 1 million of [Netflix's] 222 million [subscribers] reside in the Russian Federation."

Harrigan also said he remains "bullish" on the global direct-to-consumer streaming TV market. However, while Harrigan acknowledged Netflix's (NFLX) strong position in the streaming TV market, he also said the company's road ahead may get rough as competition grows.

"[We] view Netflix (NFLX) as first among equals rather than a dominant player," Harrigan said. Additionally, Harrigan said Netflix (NFLX) is facing "competition from other streamers [that] is now dampening member acquisition alongside the lingering Covid shadow," even as member retention overall remains strong.

Over the weekend, Netflix's (NFLX) Ozark series starring Jason Bateman and Laura Linney topped the latest Nielsen (NYSE:NLSN) streaming TV ratings.

Comments

[rod handler]

I have 60k in cash in a 180k portfolio. I have too much FB and crypto miners.

What do you think of NFLX at 350? Or should I just buy stuff like AMZN/CRM that are also down? Or keep the cash in case we drop more?

[LivefromDaGutter]

@rod handler look for names you like out of tech

[Tdog88]

People underestimating the shit out of Netflix. I’m a buyer here.

[Seriol]

I became a NFLX long at 370 before the fighting. Thinking now we're going to see across the board substantial reductions in disposable income spending, as people are simply going to be spending more on staples and energy. Worldwide.

What is the reason I should stay long at this point?

[wessle]

@Seriol at which point NFLX becomes more valuable… cutting one night out a month for most people in the West saves a lot more money than a NFLX sub…

[Seriol]

@wessle Very interesting point. Almost like a new pandemic, stay-at-home play.

[jz10]

Good thing China banned Netflix, will save Netflix the trouble of pulling out later.

[lkrawitz]

I hope we’re not going to punish companies like Netflix because of decisions in regard to Russia.

[User 52335558]

@lkrawitz Things will be back to normal before summer is here on the Northern Hemisphere.

[Ice_Kold]

@lkrawitz I punish them because their content sucks.

[lkrawitz]

@Ice_Kold are you watching the same Netflix as me?