Netflix (NASDAQ: NFLX) shares have been trading in a narrow range over the past few months after losing significant value at the beginning of the second half. NFLX stock price is trading close to $300 since September this year. The share price is substantially down from this year’s high of $380 that it had hit in July.
The share price selloff and range bound movement in the past few months’ represents trader’s bearish sentiments regarding future fundamentals. This is because of the entrance of several new players in the streaming market. The upcoming competition from Disney (NYSE: DIS) and Apple (NASDAQ: AAPL) supported bearish sentiments.
The Competitive Concerns Already Priced into Netflix Shares
The market pundits claim that the pressure of competition from Apple and Disney already impacted NFLX stock price. Disney has successfully launched its streaming service. Indeed, the company is adding 1 million subscribers per day.
Credit Suisse analyst Doug Mitchelson predicts no impact from the Disney Plus launch on Netflix trends. Credit Suisse analyst sets the NFLX stock price target at $440 with a Buy rating.
Doug Mitchelson said, “Global streaming competition is a marathon rather than a sprint, and it’s too early to consider the results of these limited datasets to be conclusive”
On the other hand, market reports are actually showing growth in Netflix users despite the launch of Disney+. Aegis Capital says the impact of competition could evolve in the long-term.
Wells Fargo, however, is bearish about the future growth prospects. The firm has provided a underperform rating from market perform with a price target of $265.
Fourth Quarter Results Could Play a Key Role
The company has reported lower than expected subscriber growth in the latest quarter. It was expecting a subscriber growth of 7 million compared to the actual number of 6.77 million.
Investors and analysts are closely looking towards NFLX subscriber growth in the final quarter. The market reports are showing increasing viewers for Netflix. Ampere Analysis indicated growth in subscribers in South America, Central America, Asia Pacific, and Europe. All these factors suggest that Netflix shares are well set to break the previous trading range.
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