Netflix Analyst Drops Bullish Stance, Says Stock Is 'Priced For Perfection'

Netflix, Inc. +1.73%

Netflix, Inc.

NFLX

621.10

+1.73%

Shares of Netflix Inc (NASDAQ:NFLX) were trading lower on Tuesday, after climbing through most of January and 2023 despite various challenges.

The stock seems to be “priced for perfection,” reflecting much of the implied advertising opportunity, according to Seaport Research Partners.

The Netflix Analyst: David Joyce downgraded the rating for Netflix from Buy to Neutral, while removing the price target.

The Netflix Thesis: The stock has “rapidly achieved” the recently increased price target of $576, Joyce said in the downgrade note.

Check out other analyst stock ratings.

“Netflix has its qualities and attributes…from which to build incremental businesses in advertising and gaming, positive FCF, and capital returns,” the analyst wrote. He added, however, that the different valuation metrics relative to growth expectations through 2027 “appear to be rather full.”

“Netflix has entered the ring to pay for sports rights - which makes more sense now that they can generate a return on that investment a few ways, with subscriptions and now advertising,” although this deal may impact margin expectations, Joyce further stated.

Also Read: Tech Giants' Market Concentration Echoes Dot-Com Bubble Peak, Analysts Warn

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga’s quote pages - like Netflix's page for example - there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Netflix does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga’s dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

NFLX Price Action: Shares of Netflix had declined by 1.9% to $564.43 at the time of publication Tuesday.

Photo: Shutterstock

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