Why Netflix Stock Took a Hit This Week on Wall Street

Nov 26, 2014  •  Post A Comment

The popular subscription-video service Netflix took a hit on Wall Street Tuesday, and analysts said it’s about a slowdown in U.S. subscriber growth.

Shares of Netflix dropped as much as 3.5% during trading Tuesday following the downgrade of the firm’s stock by the Wall Street firm Stifel, Variety reports. (Shares closed at $348.99, down 2.10%.)

Stifel analysts cited uncertainty about the U.S. growth outlook for Netflix, which missed its subscriber addition targets in its third quarter 2014 results. Stifel slapped a “hold” rating on the stock; it had been a “buy,” Variety reported.

But the firm also noted that long-term, the outlook for Netflix “remains compelling,” projecting 55 million U.S. subscribers, and a higher number internationally, by 2020.

Netflix is currently in about 41% of U.S. broadband households, the report notes, and is on track to add between 5.5 million and 6 million net subscribers during 2014, compared with 6.3 million last year.


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