“While we see ways for the stock to still work from here, we believe that the risk/reward is biased to the downside,” said Jefferies, which has a hold rating on Netflix and a price target of $210 on the stock.
Morningstar analyst Michael Corty in a recent update on Netflix said the company’s growing subscriber base is a “head start” rather than a sustainable competitive advantage in streaming content.
“We acknowledge Netflix’s rapidly growing subscriber base and respect the value it offers its subscribers,” Corty wrote. “However, we think the optimism currently priced into the shares does not account for the changes in content delivery that will lead to heightened competition for Netflix.”
Analysts polled by Thomson Reuters are looking for Netflix earnings of $1.08 a share on revenue of $703.6 million, on average.