Netflix Stock Faces Mixed Signals Amid Streaming Outages and Analyst Adjustments

Netflix Inc. (NASDAQ:NFLX) has been in the spotlight recently due to a combination of factors affecting its stock performance and user experience. On November 18, 2024, it was reported that WP Advisors LLC reduced its stake in Netflix by 10.7% in the third quarter, according to the firm’s latest 13F filing with the Securities & Exchange Commission. Despite this, WP Advisors LLC still holds 11,474 shares of Netflix, valued at approximately $8.14 million, making it the 8th largest position in their portfolio.

In addition to the institutional investor activity, Netflix faced significant streaming issues during the highly anticipated Mike Tyson vs. Jake Paul boxing match. The event, which drew a record 60 million households worldwide, was marred by widespread outages and buffering problems, leading to over 90,000 complaints on Downdetector.com at the peak of the disruption. Despite these technical issues, the fight still managed to dominate social media and set new viewing records.

Analysts have also been weighing in on Netflix’s stock performance. Recent reports suggest that Netflix’s subscriber growth may be plateauing, with ad-tier gains slowing and lower-paying members impacting revenue growth. This has led some analysts to caution that the current valuation metrics look stretched, with a forward P/E ratio near its 5-year average, indicating potential margin pressures ahead and suggesting it might be a good time to take profits.

The integration of pay-per-view events into Netflix’s subscription model, as seen with the Tyson vs. Paul fight, is a new strategy that could potentially drive subscriber growth. However, analysts predict that Netflix would need to achieve at least a 20% compound annual growth rate (CAGR) in subscriber growth over the next three years to justify its current stock price.

As of November 18, 2024, Netflix’s stock price stands at $823.96, with a market capitalization of $352.21 billion and a PE ratio of 46.63. The company’s recent quarterly earnings reported $5.40 earnings per share, beating the consensus estimate, but the long-term outlook remains under scrutiny.