Wall Street has downgraded the streaming video giant’s stock due to its dismal first-quarter subscriber outlook. It harmed AT&T’s competitors as well.
Netflix’s stock dropped more than 20% in after-hours trade following the release of its fourth-quarter results report on Thursday. Due to declining subscriber growth, this was the lowest level of streamer beat since June 2020. Meanwhile, the app added 8.28 million global paid net customers in the fourth quarter.
Netflix aims to add 2.5 million new members in the first quarter of 2022, down from 3.98 million in 2021. According to StreetAccount projections, analysts projected 6.93 million in the first quarter. Netflix has a back-end-heavy content slate planned for the first quarter, with significant premieres scheduled for March.
Netflix said it anticipated to attract 2.5 million net members in the first quarter, considerably behind analysts’ expectations of 5.7 million.
Netflix’s disappointing first-quarter subscriber projection has prompted Wall Street to downgrade the streaming video behemoth. It has also resulted in losses for AT&T, Walt Disney, and Roku.
In premarket trade, Disney (DIS), the owner of the Disney+ streaming service, slid 3% to $143.21. Roku (ROKU), a producer of streaming devices, slid 4.5 percent to $159.77. The stock of Discovery (DISCA) fell by 1.9 percent.
In premarket trading on Friday, AT&T (T) shares were down 0.5 percent. About two weeks ago, the telecoms and media conglomerate announced that it had 73.8 million HBO Max and HBO subscribers worldwide at the conclusion of the fourth quarter. It outperformed management expectations of 70 to 73 million subscribers.
The stock was downgraded from overweight to sector weight by KeyBank analysts. Netflix shares do not have a price target set by KeyBanc.
According to analyst Justin Patterson, Netflix “currently screens as a low-double-digit producer,” and investors “notice the need to accelerate degree-paid net advertisements to cross 20 million in 2H.”