Netflix Inc. (NFLX:NSD) Stock Forecast:
According to forecasts from 9 analysts, the average target price for Netflix Inc’s stock over the next 12 months is USD 339.89. These analysts have given Netflix Inc an average rating of “Buy.” Stock Target Advisor, has given Netflix Inc a rating of “Neutral,” based on 7 positive signals and 6 negative signals.
Currently, Netflix Inc’s stock price is at USD 367.96, as of the last closing. In the past week, the stock price has increased by 12.76%, in the past month it has increased by 24.75%, and over the last year, it has increased by 0.42%. These percentage changes indicate that the stock price has been trending upward in recent weeks and months, but the increase over the last year is relatively small.
Netflix News:
Netflix’s fourth-quarter margin was the lowest in several quarters, including during the pandemic. The streaming giant’s costs have been growing and profitability has been shrinking in step with rising competition. This is a concern for investors as they will want to ensure that last quarter’s required spending isn’t an indication of what’s to come.
Netflix’s ability to maintain its profitability will be a key factor in determining its long-term success as competition in the streaming market continues to heat up. It will be important for the company to find ways to control costs and increase revenue in order to maintain its position as a leader in the industry.
Analyst Coverage Change:
Phillip Securities Downgrades Netflix to an “Accumulate” rating from a “Buy” rating and raises the price target on the company’s stock to $388 from $346, based on recent price performance and factors in an expansion in margins for 2023 and 2024.
Positive Fundamentals:
Netflix is a large and stable company in its sector, with a high market capitalization that places it among the top quartile of companies. The company’s management has delivered superior financial performance, as indicated by its high return on equity, capital utilization, and return on assets in the most recent 4 quarters. Additionally, the company has had positive total cash flow and free cash flow in the most recent four quarters, indicating that it is generating more cash than it is using. Furthermore, Netflix has demonstrated superior earnings growth in the previous 5 years compared to its sector. All of these factors make Netflix a strong investment opportunity.
Negative Fundamentals:
Netflix stock has several potential downsides for investors. One is the high volatility in its total returns, which have been above median for its sector over the past 5 years. This means that the stock’s value can fluctuate greatly and investors need to have a high risk tolerance to consider investing in it. Additionally, the stock is trading at a high price compared to its peers on several financial metrics, such as price to earnings, price to book value, and price to cash flow. This means that it may be overpriced compared to other companies in its sector. Furthermore, the company is highly leveraged, meaning that it has a high level of debt compared to its equity. This can be a concern, but it’s important to look at the company’s overall strategy and management statements to understand why this is the case. Additionally, the stock is trading high compared to its peers on a price to free cash flow basis, which may also indicate that it’s overpriced.
