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Why David Einhorn Doesn't Like Netflix

Why David Einhorn Doesn't Like Netflix
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Netflix, Inc. (NASDAQ: NFLX) rose higher on Tuesday, and is thus far the S&P 500's top-performing stock of 2015 with a 142 percent gain. So why is Greenlight Capital's David Einhorn bearish?

As noted by Valuewalk, Netflix shares have soared while earnings estimates have been declining. Einhorn, for one, noted that investor Carl Icahn sold all of his shares earlier this year and turned a handsome profit.

Einhorn also pointed this problem out in a chart he sent to Business Insider, which shows Netflix's share price plotted alongside earnings estimates for the S&P 500 in 2015, 2016 and 2017.

The chart reveals that the company's shares are rallying despite falling earnings per share estimates. Einhorn warned that Netflix surged every time results were reported despite lowered Wall Street expectations for its short-term and intermediate performance.

International Subscriber Growth

Could the market be that out of touch from reality? Investors had many opportunities to express concerns of Netflix's revenue, US subscriber additions and cash burn, but international subscriber growth is still the carrot that's driving the stock.

Netflix is near the upper end of its 52-week range near $116 per share at the time of this writing.

Posted-In: David Einhorn Netflix Earnings Netflix StockAnalyst Color Short Ideas Tech Trading Ideas Best of Benzinga


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