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Netflix Stock Price Could Plunge to $230 Amid Competition

Netflix Stock Price Could Plunge to $230 Amid Competition
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Netflix (NASDAQ: NFLX) stock price plummeted sharply in the last two months amid rising competition from Apple (NASDAQ: AAPL) and Disney (NYSE: DIS).

NFLX Netflix, Inc. daily Stock Chart

The stock price fumbled from $380 at the beginning of the second half of 2019 to $270 at present. The bearish trend has erased 30% of Netflix stock price since July.

The market analysts expect the extension of the bearish trend. Bernstein analyst Juenger believe Netflix stock price could bottom around $230. This is down substantially from the current price of $270.

Bernstein analyst Todd Juenger said, “The Q2 miss, coupled with the upcoming Disney+ launch in the US (and Apple as well, and more to come), has come together to make investors reevaluate their confidence in Netflix’s subs and pricing growth.”

Netflix has missed analysts expectations for subscribers growth. It was expecting to add 5 million subscribers during the second quarter. However, the company originally reported 2.7 million subscriber addition. The consensus estimate for subscriber growth was 5.5M.

The company, on the other hand, plans to invest significantly in international markets to beat the competition. It seeks to invest in British television production.

CEO Reed Hastings says, “The possibilities the internet brings for growing entertainment is phenomenal, and over the next several years with all of the expansion I think we are going to see a very large increase in how much content is produced here in the UK.”

The company expects to regain momentum in the following quarters. It anticipates paid memberships growth of 7M in the third quarter. The company had generated paid memberships growth of 6.1M in the previous year quarter.

Rising competition from Apple and Disney is the biggest headwind for Netflix stock price performance.

Apple is looking to launch its Apple TV+ service by the end of this year. Disney, on the other hand, also announced to launch Disney+ in the final quarter this year. However, analysts believe pricing structure and leadership position would offer support to Netflix compared to its peers.

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siraj sarwar

Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.

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