Netflix Inc. has been enjoying a surge in popularity among investors on Wall Street, but one analyst is skeptical about whether the market’s expectations are too high.
Mahaney predicts that Netflix’s fundamentals will significantly improve in the second half of the year due to the crackdown on password sharing and the increasing adoption of the advertising-supported tier of service. He recommends considering an investment in Netflix after the earnings report, rather than before.
Netflix shares have outperformed the market in recent months, rising by 29% compared to an 8% gain in the S&P 500 index during the same period.
Streaming Services Face Higher Costs and Reduced Content
While Netflix may be popular among investors, consumers may soon face higher prices and limited content selection on streaming services.
As consumers continue to embrace streaming services as their primary source of entertainment, companies like Netflix are facing higher costs associated with producing original content. Therefore, as streaming services invest more in creating their own shows and movies, they may need to raise subscription fees in order to cover these expenses.
The future of streaming services seems to be heading towards a higher cost and less diverse content offering, which could potentially alter the preferences and behaviors of consumers.
