Analyst Downgrades Netflix

Subscribe to Sting alerts

Netflix may have seen its shares more than double since the beginning of the year, but Morgan Keegan analyst Justin Patterson figures they're due to fall if the company continues to spend lavishly on deals that allow it to stream relatively new movies to its customers. On Wednesday he set a target price of $100 on Netflix's stock, which closed down 5 percent to $125, largely due to Patterson's note to clients. Noting that Netflix's deal last week with Epix for Paramount, Lionsgate and MGM films reportedly cost nearly $1 billion over five years, Patterson commented that that amount works out to $1.11 per month per subscriber. "The Epix deal now represents a baseline for future content negotiations and it is plainly clear that Netflix has limited ability to take on such deals without eroding margins," he wrote. Nevertheless, he concluded that Netflix chief Reed HaStings and his team should be given their due. "For over a decade, they have defied expectations and grown Netflix into a company on pace to generate $2 billion in annual revenues. Our original thesis was that the company's early mover advantage in streaming would represent another inflection point for growth. While we remain believers in the service, data from recent content deals suggest the business is evolving differently than we had foreseen."



Tags: Sting

Subscribe to Sting alerts

More Sting

Sting Signs on to Rescue Flagging Broadway Show 'The Last Ship'

Sting has joined the cast of flagging Broadway musical The Last Ship in a bid to save the $15 million production. The Police rock star...

Sting - What Say You Meg? [Live At The Public Theater] Video

While performing live at The Public Theatre, Sting gave a performance of his song 'What You Say Meg?' The song was written for his upcoming...

Tom Hanks Gets Top American Honour For His Extensive Acting Catalogue

Tom Hanks is a mammoth actor who has delighted fans with extraordinary performances for just short of 40 years. He started his career by providing...

Celebs Get Behind Pressure To Change UK Drug Laws by Signing Letter

David Cameron will receive a letter from over 90 celebrities, politicians, lawyers and health experts, calling for a review of the current policy on the...


"Earn Your Own Money" Sting Denies Children His Fortune

Sting doesn't want his children to inherit his £180m fortune so that they can earn their own way in the world. The British rocker revealed...

Sting's Children Will Not Inherit £180 Million Music Fortune

Sting is no pushover.The 62 year-old music star recently revealed that none of his £180 million fortune will be left to his children.Sting grew up...

Tony Awards 2014: So How Did Hugh Jackman Do?

Not only are the Tonys hilarious, entertaining… glittery, etc. – they’re also pretty democratic. In an over-the top show hosted by Hugh Jackman, top prizes...

Neil Young's Pono Player Raises $6.2 Million, But Will We Buy It?

Neil Young was only looking for $800,000 to launch his new Pono Player, but his Kickstarter goal was obliterated in less than 24 hours this...



Sting Newsletter

Subscribe to this news alert service to receive news and reviews on Sting

Unsubscribe | Unsubscribe All