Netflix’s stock price rose 30 percent in 2012, but investor confidence can’t replace harsh reality. So says Wedbush Securities analyst Michael Pachter, who is bearish on the streaming and DVD company.
Pachter thinks Netflix stock is overvalued and that the company has already converted the majority of potential customers its going to get. The upcoming launch of Redbox Instant by Verizon and stronger competition from the likes of Amazon aren’t helping Netflix’s case either, according to Pachter. Said the analyst:
“Consensus estimates for domestic earnings power appear overly skewed in favor of domestic streaming, which we think generates $1.20 income per share, and we believe that Netflix’s DVD business ($3/share) will decline as international expansion (a loss of $4.20/share) continues, making profitability in 2013 unlikely,”
What do you think, Insiders? Are Netflix’s best days behind it?
[via Home Media Magazine]