After falling some 5% in one week, Netflix shares recouped a little of those losses Monday. But, Tuesday pre-trade is looking less positive.
After rising 1.59% to close at $195.08. in the Monday US trading session, Netflix shares are poised to open in the red Tuesday.
The reason? A variety of them. They include analysts getting real over the growing competition in the streaming market, ongoing issues with one or two of Netflix series stars and Netflix' unwavering commitment to producing its own, original content.
Netflix valuation under discussion
In the face of a number of developments, analysts are taking a close look at the valuation of the US streaming giant. In the $190s per share, Netflix remains much lower than its FANG competitors.
However, given the growing streaming market and Disney’s plans, there are some bumps in the road ahead for Netflix. On the plus side, though, it knows about them.
And, Netflix has also already announced plans to expand its own home-grown production offerings. A major positive in those plans is the creation of more locally-based stories for each country audience, as well as the bigger series and films designed to appeal world-wide.
Lord of the Rings, loss or gain?
Analysts and investors are keen to focus on Netflix content, and it’s still growing stable of productions is something to be excited about.
But, news Netflix lost out to Amazon for the rights of the Lord of the Rings series could be seen as a disappointing development.
However, Amazon is reported to be paying in the region of $250 million for the rights alone. In a deal that’s also said to cover multiple series, that’s likely to be barely the tip of the iceberg when the total investment is considered.
Netflix, meanwhile, can create and manage its own productions for a price it considers fair value. Of course, Amazon can do that with its own original series, but this additional investment is a big one.
Right now, Netflix investors are likely considering the best way forward for the stock. But, with such a mixed outlook and analysis to draw on, it may take a while longer for Netflix to make a lasting move in either direction.