Netflix Faces Fresh Wall Street Doubts as Engagement Concerns Build

Netflix is facing growing skepticism on Wall Street as analysts question subscriber engagement and the supply of hit shows. The stock is down 26% this year, and 48 of the 65 analysts covering it have buy ratings, the fewest since March, according to Bloomberg data.

HSBC cut Netflix to hold last week, citing signs of weakening engagement. Wells Fargo downgraded the company earlier this month, pointing to a lack of hit shows.

Shares closed Monday at $69.23, down 2.69% from the previous close. Netflix is also contending with competition from YouTube, whose share of the US television market reached 14.2% in July, while Netflix’s fell below 8%, according to Bloomberg Intelligence.

Accuv​​est Global Advisors’ Eric Clark said Netflix needs more widely discussed hits and described a possible creativity problem. His firm owns Netflix shares but has been reducing its position.

Netflix’s next financial update is scheduled for October 20. Wall Street expects revenue growth of nearly 12%, which would be the slowest since 2023, while net income is forecast to rise 36%, according to Bloomberg data.

Some investors remain optimistic, citing Netflix’s record of finding popular shows and expanding into areas such as sports, podcasts and gaming. The shares trade at about 19 times estimated earnings, compared with a 10-year average of almost 50 times, the article reported.