(CercleFinance.com) – Netflix announced last night that its annual forecasts were slightly lower than expected and that it had decided to stop publishing its new subscriber figures, which led to a fall of almost 8% in its stock at the New York Stock Exchange on Friday in early trading.
The American Internet video specialist nevertheless revealed figures for new subscribers on Thursday that were significantly higher than expected in the first quarter.
The company says it gained more than 9.3 million new subscribers in net terms over the first three months of the year, compared to a figure of five million expected on average by analysts.
In a reaction note, BofA analysts indicated that they had raised their price target on the stock from $650 to $700 following this performance, while reiterating their buy recommendation.
However, some professionals believe that the forecasts communicated by the Californian group for the second quarter and the entire 2024 financial year turn out to be rather disappointing.
For the current quarter, Netflix said it was targeting revenue growth of 16%, compared with 15.9% in the first quarter, but its forecast for 2024 is more modest, between 13% and 15%.
Investors seem especially taken aback by the announcement that the company has decided to no longer reveal the figures for its new subscribers from its 2025 quarterly publications.
‘It may still be a little too early to say, but the problem is that subscriber growth has slowed considerably in 2022 (before codeshare ends), which could be a warning sign of a slowdown in growth to come’, decipher the BofA teams.
According to Wedbush, the move is consistent with his theory that Netflix is currently transitioning from a model of high growth with limited profitability to lower growth, but more profitable.
‘Despite everything, this pivot towards high profitability and slowed growth is still far from being accomplished,’ underlines the research office.
For some analysts, this quarterly publication is simply an opportunity to take profits after the spectacular stock market performance signed by the VOD specialist in recent months.
‘Even if these results and the outlook are rather solid, we see few catalysts likely to support growth in the coming quarters,’ warns the Canadian broker Canaccord Genuity.
‘Knowing that the stock has jumped nearly 90% over the last 12 months and around 25% since the start of the year, investors would be well advised to look for upside potential elsewhere,’ he adds. , lowering its advice on the title from ‘buy’ to ‘hold’.
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