Netflix, Inc. shocked Wall Street by reporting below-consensus first-quarter revenues and a loss of net paid subscribers.
The Netflix Analyst
KeyBanc Capital Markets analyst Justin Patterson maintained a Sector Weight rating on Netflix shares.
The Netflix Thesis
Netflix’s first-quarter results reinforce KeyBanc’s view that gross adds is an industry-wide challenge, given market penetration rates and increasing competition, Patterson said in a note.
Fixes such as a crackdown on password sharing and building an ad-supported service will take about 18-24 months, the analyst said. KeyBanc’s survey suggests that there is more interest for ad-supported content among Netflix subscribers than non-subscribers, he added.
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