Netflix stock (NFLX) isn’t the hottest commodity these days and it might be even less desirable after it received a downgrade from Goldman Sachs. In a recent note to clients, Goldman’s analyst Eric Sheridan said that his team has various concerns related to NFLX while changing the stock’s rating from Neutral to Sell.
“We have concerns around the impact of a consumer recession as well as heightened levels of competition on demand trends (both in the form of gross adds and churn), margin expansion, and levels of content spend and view Netflix as a show-me story with a light catalyst path in the next 6-12 months,” said Sheridan while changing the price target on the stock from $265 to $186 per share.
NFLX lost more than 70% of its value in the past six months. This plunge resulted from a loss of subscribers and reports about expected losses in the next quarter. The investors are also worried about the company’s long-term viability due to heightened competition.
In order to recoup the trust of investors, Netflix is considering introducing ads to its platform despite previous pushback from CEO Reed Hastings. The streaming service giant believes this would help them remain competitive, increase their revenue, and gain new subscribers through cheaper ad-supported plans.
