Netflix (NFLX) has a big issue: People don’t want to pay for their own accounts anymore.
Hedgeye analyst Billy Zegras broke down the Communications team’s top active short recommendation this morning on The Call @ Hedgeye.
“The password crackdown is creating an earlier-than-expected slowdown in gross subscriber acquisition,” Zegras explained. “People don’t want to pay for their own accounts anymore.”
“We think there’s a big expectations gap here between where we’re at and where the Street’s at,” he continued. “The bottom line here is the Street’s gotten incrementally more bullish on the stock, and we think it’s tapped out on the high end.”
The lack of new/compelling content mixed with increased competition and the recent password-sharing crackdown is creating the perfect storm a day ahead of Netflix’s Tuesday earnings call.
Click above for the full breakdown.
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