Netflix app (Photo by Phil Barker/Future Publishing via Getty Images)
NetflixNFLX
, once a darling of the tech world, has been receiving a barrage of bad news lately.
The streaming service lost three million subscribers in the first half of the year, along with many well-heeled competitors (Disney Plus, AmazonAMZN
AMZN
Prime, etc.) eaten into its market. While it says it will regain paying viewers in the third quarter, the forecast was lower than Wall Street was expecting. The company had fewer Emmy nominations than rival HBO this year. It laid off part of its workforce.
No wonder the stock is down 62% in 2022. Investor disappointment is something new for Netflix, whose shares are up 21x in the 10 years that peaked late last year. Netflix was once a member of the FAANG collection, which included Facebook (now Meta Platforms), Amazon, AppleAAPL
and Alphabet’s own GoogleGOOG
. These are some of the most prominent tech outfits in the world with much higher market caps and power. Nobody would group Netflix with them now.
Netflix fans are touting its still-impressive string of hits, with Stranger Things season four being the most recent, and others like The Gray Man and Bridgerton illuminating the creative side. In addition, management takes steps to improve operations such as: B. Introducing a lower-cost, ad-supported alternative; crackdown on password sharing; and plan to produce fewer — and it says better — shows.
Some of the stock’s attractions for Netflix investors include its affordability (it’s now value-play rated, with a price-to-earnings ratio of 18), it’s worth a decent amount (market cap: $100 billion), remains solidly profitable and still boasts a good subscriber base of 221 million.
