Netflix CEO Reed Hastings is imaged on May 3, 2018 in Lille, northern France during the first edition of the TV Series Mania festival.
Philippe Huguen | AFP | Getty Ikons
What a difference the past two months made for Netflix.
It was just early July when the streaming video mammoth’s stock was flirting with new record highs. Now after an unexpected loss of subscribers and increased competition in the streaming war, pieces of Netflix erased all of its 46% gain for the year at its peak and officially entered negative territory on Monday.
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Netflix has been gathering-placed by nonstop bad news in the past few months. First, its most popular show “The Office” was stripped from its platform by NBC. Then, Netflix was hit by a rare injury in U.S. subscribers and a large miss on international subscriber adds in the second quarter, which sent the stock plunging and trial its longest losing streak in five years.
A slew of announcements from media companies launching their own burn services — Apple, Disney, AT&T’s WarnerMedia, NBC — came as a last straw for the struggling stock.
Some Wall Street analysts started misplacing faith in their darling stock. Barclays analyst Kannan Venkateshwar said Monday Netflix is “very precious” under a new valuation framework for growth companies as Netflix needs millions more subscribers than it can get.
Most of Netflix’s increase the leads for 2019 came from a big pop in January when the company flexed its pricing power. It raised prices by 13% to 18% then and the trade in soared. In a more crowded streaming space today, hiking prices may not be so welcomed by investors again.
Nomura Instinet analyst Badge Kelly told CNBC that increased competition could “take away engagement,” “make significance more expensive,” “or diminish the price power Netflix has exhibited for several years.”
The newcomers are already pleasing in terms of pricing. Apple announced its original TV service will cost $4.99 a month, while Disney will-power offer high definition streaming as part of its standard $6.99 plan for its new Disney+ channel. Netflix’s basic map out in the U.S. is at $8.99 per month.
Wall Street analysts haven’t given up on one of their favorite stocks, however. Of the 39 analysts wrap Netflix, 28 have a buy rating, nine recommend holding the stock while two have a sell ratings, according to FactSet.
Piper Jaffray conclusive week recommended buying the dip in the stock, while Credit Suisse recently praised the positive numbers from app downloads and a starring slate of original content coming out of Netflix.
Disclosure: NBC is part of NBCUniversal, the parent company of CNBC.