Netflix’s Stock Has Been Downgraded To A Sell Rating In The Light Of Its Re-evaluation Of The Internet Industry

June 10, 2022 at 17:36 PM EDT

According to the investment bank, Netflix’s NFLX–5.33% stock has been downgraded to a Sell rating in THE light of its re-evaluation of the internet industry and its negative outlook on Netflix.

Stocks of Netflix (NASDAQ: NFLX), eBay (EBAY –2.99 percent), and Roblox (RBLX) have all been downgraded, and rightfully so. As one of the first FANGs—Facebook META –2.35 percent, now Meta Platforms (META), Amazon.com AMZN –4.21 percent (AMZN), Netflix, and Google-parent Alphabet GOOGL –3.02 percent (GOOGL)—it was virtually hard to conceive how other media firms would compete, much alone catch-up. But here we are, with Netflix’s stock falling by 68 percent in 2022 due to fears about rising expenses and more competition.

Analyst Eric Sheridan of Goldman Sachs has slashed the stock’s neutral rating to “sell” despite the stock’s recent decline. Consider that. Sheridan feels the stock is still excessively costly, despite the fact that it has lost two-thirds of its value. What’s got him all worked up? A consumer recession and increased competition on demand patterns (such as gross additions and churn), margin expansion, and levels of content investment are among his worries, according to his analysis of NFLX. “We regard NFLX as a show-me story with a mild catalyst path in the next 6-12 months,” he adds.

This means that although competition and content expenditure are still issues, the risk of a downturn in the economy has now been added to the mix.

Goldman Sachs has Netflix stock moving in premarket trading, with shares down 4.4% at $184.22 in premarket trading.

After all that, Sheridan wasn’t finished yet. He also slashed eBay to Sell, citing worries about the “post-pandemic climate” and “normalization of margins.”

The stock of eBay has decreased 3.3%, while the stock of Roblox has plummeted 4.6%.

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