Market Underestimates Competitive Pressure For NFLX

Analysts at Janney Montgomery Scott maintain their "sell" rating on Netflix (NASDAQ: NFLX).

According to Janney Montgomery Scott, Netflix’s TWX deal is likely to have been less favorable than the management expected, as it could impair churn rates if subscribers feel deprived of content. “The NFLX and Redbox deals show that studios have the upper hand in negotiating terms, which we contend will only get stronger as we move to digital,” the analysts say.

The analysts express their concern regarding “NFLX being hurt, as kiosks and cable cloud its initiatives ramp-up and siphon subs from both ends of the user spectrum, which will negatively impact core subscriber metrics including SAC, churn, and gross sub additions.”

More Analyst Ratings here