Streaming video platform Netflixis the only original FANG member not included in the MAMAA group.

Since Cramer’s original FANG list in 2013, Netflix has expanded its business internationally and invested heavily in original content. It has recently focused on adding a lower-priced subscription tier that will be supported by advertising. Netflix will also reportedly be aggressively cracking down on password sharing in 2023.

Netflix added 2.41 million global paid net subscribers in the third quarter, but its revenue growth slowed from 16.2% a year ago to just 5.9%.

Netflix is also facing an unprecedented wave of streaming competition from Disney (DIS), Amazon, YouTube and others. Even after a 51% year-to-date decline, CFRA analyst Kenneth Leon says Netflix shares are still overvalued.

“It is a slow-growing media company with single-digit revenue growth and intense competition,” Leon says. “Our biggest concern is that both subscribers and advertisers will weaken in a 2023 recession as the Fed continues to raise rates,” Leon says.

CFRA has a “sell” rating and $225 price target for NFLX stock.

Leon isn’t alone in his belief that Netflix has a difficult journey ahead. The average price target among the 43 analysts covering NFLX stock is $305, suggesting just 4.3% upside.

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Last Update: July 1, 2024

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