Bernstein Reduces PT on Netflix (NFLX) on Near Term Margin Concerns

​On April 20, Bernstein SocGen Group reiterated an Outperform rating on Netflix, Inc. (NASDAQ:NFLX) but lowered the price target on the stock from $115 to $110. The reduced price target is based on near-term margin concerns. Despite the concerns, Netflix ranks among the Best Stocks to Buy and Hold For the Next 5 Years.

​Analysts at Bernstein highlighted that after the latest guidance from the company, their confidence in Netflix’s profit margins has started to fade. The firm pointed out that the company expects low margin expansions, which makes the previous estimates of 2027 EPS topping $4 feel uncertain rather than guaranteed.

​The key reason behind the concerns is a big jump in spending as the competition has increased, which is leading to higher content amortization. Moreover, the tech and marketing-related investments have also increased in an effort to retain users.

​Despite these concerns, Bernstein highlighted that core metrics such as subscriber growth and pricing power remain solid. If we look at the consensus opinion, 71% of the 56 analysts have a Buy rating on Netflix, Inc. (NASDAQ:NFLX). Moreover, the 12-month average price target on the stock represents more than 23% upside from the current level.

​Netflix, Inc. (NASDAQ:NFLX) offers streaming entertainment content and services globally.

While we acknowledge the risk and potential of NFLX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NFLX and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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