Market volatility is evident from the CBOE Volatility Index’s 56.6% year-to-date gains ahead of July’s Federal rate hike. According to Leon Cooperman, chairman of Omega Advisors, stocks couldfall 40% from their peak. And he expects the U.S. economy will likely witness a recession in 2023.
Moreover, deteriorating consumer confidence and deceleration in consumer spending are concerning. Gold IRA Guide Survey recently discovered that70.5% of U.S. consumers believethe global economy will hit a recession in 2022.
Given the backdrop, we think it could be wise to short, liquidate or avoid fundamentally weak stock Netflix$Netflix(NFLX)$ now.
NFLX provides entertainment services. It offers TV series, documentaries, feature films, and mobile games across various genres and languages. It allows members to receive streaming content through a host of internet-connected devices.
On June 14, 2022, analyst Matthew Harrigan cut his rating on NFLX to Sell from Hold.
NFLX’s revenues came in at $7.87 billion for the first quarter that ended March 31, 2022, up 9.8% year-over-year. However, its net income decreased 6.4% year-over-year to $1.60 billion, while its EPS came in at $3.53, down 5.9% year-over-year. Also, its cash,cash equivalents, and restricted cash came in at $6.03 billion, down 28.5% year-over-year.
NFLX’s forward EV/S of 2.92x is 51.2% higher than the industry average of 1.93x. Its forward P/S of 2.44x is 88.6% higher than the industry average of 1.29x.
NFLX’s EPS is expected to fall 3.6% year-over-year to $10.84 in 2022. The stock has lost 70.6% year-to-date to close the last trading session at $177.34.
NFLX’s POWR Ratings reflect its poor prospects. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
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