The only other price dropping as swiftly as the new subscription deals from Apple and Disney, is the Netflix stock price. According to the CNBC analysis, there is a reason for one to believe that the upcoming trading move for Netflix could actually be a significant yet short-term rally.
After acquiring as high as 46 percent gains this year, the company experience the stocks tumbling down last week with a massive drop of 10 percent. This stripped-down all the gains for Netflix made in the year 2019. Over the term of last five years, the stocks for Netflix experienced similar losses over 18 separate occasions. The trend is that two weeks post the drop, this steaming giant bounces and makes up for the losses.
It has an average gain of 3.6 percent, which is more than the double return for the S&P 500 in the same time period. The company also trades in the positive line about 67 percent of the overall time frame, as confirmed by Kensho data. These recent drops come from the fact that Apple is now offering its latest streaming service at a price tag of $4.99. Users can also get a one-year worth free subscription with purchase of the latest iPhone.
Apart from that, Disney+ has decided to offer its HD steaming service as a bundled option with its standard plan worth $6.99. Talking about Netflix charges; the basic plan for Netflix in the United States starts at a whopping $8.99 monthly. However, it isn’t just the steaming crusade intensification that has kept the Wall Street officials on edge. On Tuesday, Pivotal Research Group chopped its price target by 1/3rd for Netflix shares. The prices dropped down from $515 to $350. Additionally, the group warned that higher than anticipated licensing costs for content would further add to the latest competitive pressure in the market.
Last week, Bernstein slashed its current price tag on the streaming giant by a whopping 20 percent, dropping it down to $230. Concerns regarding slow subscriber growth & free flow of cash could also introduce a weak result in the earnings of the 3rd quarter for the year, as estimated by Pivotal. In a note released on Monday by KeyBanc Capital Markets, it was noted that regardless of Netflix trying its best to churn out good reports for the month of October, the competitive pressure is more likely to weigh down any sustenance potential, especially after Disney and Apple have entered the market.