Analyst are Cutting Estimates on These 5 Tech Stocks

1. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 109

Netflix, Inc. (NASDAQ:NFLX), the American subscription streaming and original production company, has plummeted from its pandemic highs and the stock is down 67% year to date as of July 18. In Q1 2022, 109 hedge funds held long positions in Netflix, Inc. (NASDAQ:NFLX), down from 113 funds in the last quarter. Bill Ackman’s Pershing Square is a notable Netflix, Inc. (NASDAQ:NFLX) stakeholder, with 3.10 million shares worth $1.16 billion. 

JPMorgan analyst Doug Anmuth said investor sentiment is cautious and expectations are “muted” heading into Netflix, Inc. (NASDAQ:NFLX)’s Q2 results on July 19. The company lost 2 million subscribers in Q2, and the analyst thinks investor expectations are a bit worse at between 2.5 million and 3 million. The analyst kept a Neutral rating on the stock with a $230 price target on July 14. UBS analyst John Hodulik lowered the price target on Netflix, Inc. (NASDAQ:NFLX) on July 15 to $198 from $355 and also reiterated a Neutral rating on the shares.

Here is what Tidefall Capital Management has to say about Netflix, Inc. (NASDAQ:NFLX) in its Q1 2022 investor letter:

“With Netflix (NASDAQ:NFLX) stock down by more than 50% since its high in November (and 10% below Reed Hastings’ $20m purchase in January) we re-entered the position in April believing we were being greedy when others were fearful. Unfortunately, its most recent results were well below expectations causing the shares to get cut in half (again).

(It’s interesting to note that this is not the first crisis for the company. In 2011, Netflix broke out its DVD service and streaming into 2 separate offerings, with the DVD by mail option called Quickster, the resulting price hike and confusion saw millions of subscribers leave and the stock fell 75%. The company would ultimately reverse the decision and continue its global ascent.)

In Q4 2021, Netflix forecasted for 2.5m – 4m net subscriber additions but ended up actually losing 200k (adjusted for exiting Russia they would have gained 500k subscribers). Q2 guidance was even worse as Netflix is now predicting that they will lose 2m net subscribers although the company still believes it will have positive net subscriber additions for the full year. Recent price hikes and an onslaught of new competitors are no doubt creating a more unfavorable competitive environment. However, we think it is important to step back and look at what Netflix has built and the advantages it now holds…” (Click here to see the full text)

You can also take a look at 10 Cheap ETFs to Invest In For Beginners and 10 Monthly Dividend Stocks With Over 5% Yield. 

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