After it reported a subscriber loss in Q1 2022, Netflix (NFLX) is signaling that it is not going to be business as usual. As it pursues new growth opportunities, the company is taking steps into areas it has long avoided. According to a Deadline report, Netflix is gearing up to launch live streaming for the first time.
Netflix’s live content could feature comedy events, live voting for contest shows, and other special events. Sport is currently not included in Netflix’s live programming plan, according to the report.
Ad-Supported Plan and Password Crackdown
Another business that Netflix avoided in the past but has decided to embrace now is advertising. According to a New York Times report, the company plans to introduce a low-priced plan supported by advertisements before the end of 2022. Netflix has also decided to crackdown on password sharing as it seeks to seal revenue leakages.
Wall Street’s Take
On May 13, J.P. Morgan analyst Doug Anmuth reiterated a Hold rating on Netflix stock with a price target of $300, which indicates about 60% upside potential.
The stock has a Hold consensus rating based on seven Buys, 29 Holds, and three Sells. The average Netflix price target of $299.93 implies about 60% upside potential to current levels.
Smart Score
According to TipRanks’ Smart Score system, Netflix gets a four out of 10, which indicates that the stock is likely to perform in line with market averages.
Key Takeaway for Investors
For a long time, Netflix has mostly played by its own rules. However, as market competition tightens, it has to open up to practices it may not have been comfortable with in the past. While competition may be forcing Netflix to change its practices, the change could benefit the company as it enters potentially lucrative new segments such as digital advertising.
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