Netflix's stock price plunged 35%, to $226.19, after the streaming giant revealed it lost 200,000 subscribers in the first quarter.
Netflix cited several reasons for the subscriber loss, including rising competition and password sharing. Executives said they would consider a lower-priced option with ads.Now, some analysts are questioning how large the streaming market is and whether Netflix’s initiatives to add more subscribers will work.
Several analysts cut their price targets for the stock significantly. Kenneth Leon, research director at CFRA Research, slashed his target price for Netflix stock to $290 a share, down from the previous target of $525 a share, and moved the firm’s recommendation to “hold” from “buy.” Research firm MoffettNathanson dropped its target price for Netflix by $105, to $245 a share, noting that this situation “feels different as the first quarter 2022 earnings release, investor letter and video interview portrayed a company that was more surprised by things and less clear than ever about the path forward.”
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