Overnight NFLX plunged after delivering its lowest first quarter growth rate since 2013 illustrating that some tailwinds from COVID will not last forever. Additionally its facing increasing competition from companies with cheaper offerings, it was only back in October when the Northern Hemisphere were all watching NFLX as the pandemic raged that Netflix opportunistically raised their prices.
The company remains solid after generating free cash flow of almost $US700m in Q1 enabling them to reduce debt and buyback $US5bn of stock however the issue is about growth, investors here are focussed heavily on quarter on quarter growth rates to justify it’s valuation of 53x est. 2021 earnings.
MM is bearish NFLX short-term
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