Brokers Cut Netflix Target Price amid Projection of Losing 2 Million Subscribers in 2Q22

Netflix Inc (NASDAQ: NFLX) is scheduled to announce its second-quarter earnings later today after a disappointing performance in the previous quarter at a loss of subscribers.

In the statement of its first-quarter earnings, Netflix projected a loss of 2 million paid subscribers for the second quarter. The loss came as a large number of households were sharing accounts, resulting in lower subscribers. Net income in the first quarter also decreased to $1,597 million from $1,707 million in 1Q21.

“Our revenue growth has slowed considerably,” Netflix wrote in a letter to its shareholder on April 19, 2022, after announcing its financial statement. “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally.”

“However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds. The big COVID boost to streaming obscured the picture until recently,” added Netflix.


Refinitiv consensus also forecast a little over two million subscriber loss for Netflix in the second quarter.

Amid concerns of slower growth and lower subscribers, some securities houses are cutting Netflix’s target price simultaneously. Rosenblatt Securities cuts Netflix’s target price to $196.00. UBS Group trims the price to $198.00 per share. Evercore ISI cuts target price to $245.00 and Guggenheim Securities maintains the price at $265.00 per share.