Wells Fargo Is Right -- and Wrong -- About Netflix
Wells Fargo analyst Steven Cahall recently made a valid enough point about streaming video leader Netflix (NASDAQ: NFLX). That is, in the wake of a well-received launch of a rival service from Walt Disney (NYSE: DIS) and another one being planned by WarnerMedia parent AT&T, something has to give. Cahall is concerned that Netflix will decide to spend more in an effort to sustain impressive subscriber growth rates (and to keep investors happy).
Cahall's explanation of the downgrade, though, looks past an important detail -- Netflix was making measurable progress on its per-user costs beginning earlier this year. The advent of Disney+ and a stand-alone video service from Apple certainly give shareholders something to keep tabs on, but it's arguable Netflix has already achieved fiscal escape velocity, so to speak.
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Source Fool.com
