Netflix shares entered the negative ground on Monday, following record highs in July and an overall 46 percent gain for the year when it hit peak numbers. Some Wall Street experts are now expressing concerns for the stock they once adored.
According to CNBC, this is the first time in five years that the stock experienced a long losing streak. Multiple factors caused the stock to plummet and struggling to find its ground in the second quarter.
Among the analysts who expressed pessimism over Netflix, shares are Barclays' Kannan Venkateshwar. He labeled the stock as "very expensive," now that it is following a new valuation framework.
The biggest aspect of concern that industry experts raised over Netflix's negative territory move is the consequence of hiking prices. The streaming giant increased prices twice, resulting in the stock soaring during the first half of 2019.
However, analysts said some investors do not welcome high prices. Furthermore, competition is fiercer than ever in the form of Apple, Disney, and other rivals. Indeed, the streaming service saw a dramatic decrease in subscriptions in Q2.
Amid increasing concerns for Netflix's performance for the remaining months of 2019, CEO Reed Hastings admitted that competition will keep intensifying in the coming months, particularly in the streaming segment, Yahoo Finance reported.
On the other hand, Netflix is expected to put up a fight. Industry analysts predicted that the streaming service will spend around $15 billion this year on binge viewing and content. It is worth noting that the company won 27 Emmy trophies this year.
Other investors and market analysts also retained their faith in the stock, with Zacks' EVP Kevin Matras stating that Netflix is not yet where it should be. He said the stock is just starting the climb towards becoming one of history's greatest investments.
As of Monday's trading, Netflix shed 1.8 percent, FOX Business reported. While it was a notable stock that investors looked up to under the FAANG (Facebook, Amazon, Apple, Netflix, and Google) circle, fears of slowing growth for the company affected the outlook.
On Friday, Netflix shares dropped by 5.5 percent, shaking investor sentiment that once stood on solid ground. On the other hand, many market experts believe that streaming is the future of television and film.
While Netflix has yet to recover from its roller-coaster months on Wall Street, the company is expected to bounce back with new content and binge-watching promotions that should attract more subscribers. The streaming giant's prices are still higher than that of AppleTV but industry experts believe prices could go down for competition.
