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JPMorgan lays out three major investor concerns on Netflix
Netflix shares have lost half their value since the company reported Q1 earnings and sentiment remains quite cautious, Anmuth tells investors in a research note. Beyond the broader market backdrop, the analyst believes three major concerns are on the minds of investors: the lack of clarity on timing and the range of outcomes around account sharing efforts and advertising, the lack of visibility on second half of 2022 subscribers and limited catalysts near-term, and a lack of understanding of how Netflix "flipped from interpreting recent soft subscriber numbers as pandemic hangover to a function of competition and higher penetration due to account sharing." The shares have traded down to levels now suggesting 14.5 times estimated 2023 GAAP earnings "as some seem to forget this is a 20% GAAP operating margin business that should still have positive FCF this year," writes Anmuth. He keeps a Neutral rating on Netflix with a $300 price target.