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Netflix Inc (NASDAQ:NFLX) reported negative net subscriber additions for the first quarter, at -203,000 versus guidance of 2.5 million and Street expectations of 2.6 million, according to BofA Securities.
The Netflix Analyst: Nat Schindler downgraded the rating for Netflix from Buy to Underperform, while reducing the price target from $605 to $300.
The Netflix Thesis: Paid net subscriber additions declined across all regions, except the Asia-Pacific region, Schindler said in the downgrade note.
Although earnings came in at $3.53 per share, beating the consensus estimate of $2.89, the company’s revenues stood at $7.87 billion, missing Street expectations of $7.93 billion, he added.
Also Read: How Long Will It Take For Netflix To Set Its House In Order?
“The Street reacted overwhelmingly negatively, with shares down 25% in after-hours trading. The Street now knows that the low guide last quarter was not an aberration, and we expect it will take a while for investors to believe NFLX can return to growth,” the analyst wrote.
NFLX Price Action: Shares of Netflix had declined by 35.72% to $224.10 at the time of publication Wednesday.
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