Who would say that it is time to pull money out of Netflix stock? Is the company not everyone’s favorite movie and television streaming service? Well that may be the case, but at least one institutional investment firm is saying that now is the time to reconsider purchasing or holding onto Netflix stock.
That firm is Buckingham Research Group says CNBC.com, and they are not afraid to admit that they believe that now is the time to take some of the chips off of the table when it comes to Netflix. They have concerns about how much the company is spending on content right now in order to hopefully boost profits in the future.
Buckingham Research Group did go out of its way to say that it does not fear that Netflix is in jeopardy as a result of other companies entering its space as of late. They know that other players like Disney and Amazon have stepped up their streaming services too, but the firm believes that they will just be compliments to Netflix, not true competition. That being said, they do not like to see the approximately $4 billion in negative cash flow as a result of Netflix purchasing up so much content at the moment.
The fourth quarter of 2017 was a really big one for Netflix as they said they added 8.3 million new subscribers compared to expectations of just 6.4 million. They also boasted strong quarterly earnings. On that news, the shares of the stock were up about ten percent to $251 per share.
The company does not often face downgrades of any kind, and that is perhaps for good reason considering all of the growth that it has had over the years. The downgrade that it did receive this time is the first time it has gotten one since September of 2016. Therefore, you might want to take this cautionary note from one firm with a grain of salt. Other firms are still positive on the fate of Netflix.
The streaming service still remains wildly popular obviously. They have continued to grow their customer base over the years, and they still added all of those new subscribers even in the fourth quarter. They might be spending a lot on content, but it does seem to be attracting a lot of viewers. Those viewers translate to money for Netflix, and there is nothing wrong with that.