Netflix’s 340% Rally Seen Sputtering With Sales Growth Past Peak
- Shares soared due to password crackdown, new ad-supported tier
- Average analyst price target implies just 4% upside for shares
Netflix is expected to report revenue growth of 14% in the third quarter.
Photographer: Gabby Jones/BloombergThis article is for subscribers only.
After a breakneck rally that added more than $230 billion in value, Wall Street is indicating that peak Netflix Inc. may have arrived.
Shares in the streaming company soared almost 340% from a May 2022 low to their record high earlier this month. Revenue growth has been strong because of a password-sharing crackdown and the introduction of lower-priced, ad-supported subscriptions. But as the company gears up to report third-quarter earnings on Thursday after the close, some are concerned that those drivers may be running out of steam. Netflix shares slipped as much as 2.3% intraday Thursday, falling for a fifth consecutive session.