Netflix stock has gained significantly so far this year, despite a recent blip; analysts takes a look at the viablity of the stock as an investment option, in current market conditions.
The S&P 500 declined 8.56% over the last 2 weeks, including a minor reversal over the last four days of trading. Netflix Inc. has been the leading performer of the S&P Index this year, but has acted unpredictably during the similar two weeks; the stock was down 21% earlier last week, before regaining 13% in the last four days of trading.
Analysts at Bidness Etc take a look at the probable price path for the company stock and why Netflix stock isn’t a good buy in present market situation.
Warren Buffet introduce a trading strategy over 30 years ago, which states that when deciding the investment, avoid thinking about which stock to buy, instead think about acquiring the business. It seems like the investors have forgot this strategy in Netflix case.
When it comes to service, the streaming giant is amazing and the company has lots of potential but analysts believe that has ignored the fundamentals while making the investment decisions. Netflix stock has gained over 115% year to date and has witnessed various significant increases during the whole period. If we evaluate the increase in share price, it looks like that it mostly went up as a result of the market increase.
As a whole, the Street is bullish on Netflix stock. Almost 45 analysts covered the stock, out of whom, 23 rate it a Buy, while 16 gave it a Hold.
The consensus price target for the company stock stands at $117.91, compared to the present stock price of $115.15, reflecting an upside potential of approximately 2.4%. The stock return potential just became positive followed by the substantial decline in value of stock over the last 2 weeks. Before this, the consensus price target was under the market price representing less confidence in calls, also by bullish experts.
Pivotal Research Group LLC , Jefferey Wlodarczak is the analyst with most bullish outlook on Netflix stock with $175 price target and a Buy rating; Wedbush analyst, Michael Pachter is the most bearish of all analysts with $40 price target and Underperform rating.
By looking at the trend, it can be observed that the consensus price target has regularly lagged market price in the last 6 months. This specifies that reviews from the Street were conservative and majority of analysts hadn’t been projecting an increase in the share price.
Netflix stock was down 3.50% to $111 during pre-market session today as of 07:48 AM EDT.