An analyst’s word can often turn a stock price in any direction based on how positive or negative that word is. Streaming giant Netflix (NASDAQ:NFLX) showed us that much, up significantly in Wednesday afternoon’s trading after a new report from Oppenheimer. Oppenheimer analyst Jason Helfstein had no shortage of positive notes about Netflix, particularly in terms of its latest moves. The password-sharing crackdown is working quite well and bringing in plenty of new users, thanks in no small part to the recent discounting that went along with that crackdown.
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But what also helped Netflix, Helfstein noted, was its move to quietly remove its Basic plan in Canada. Normally, Netflix offered three subscription tiers: one for $9.99 Canadian, one for $16.49, one for $20.99, and now, one for $5.99 with ad support. The $9.99 tier was quietly removed a while ago for new subscribers, though current subscribers can keep that plan as long as they subscribe.
This has left many wondering if the Basic tier will be removed in more places soon. Already, in the United States, the Basic tier isn’t removed so much as hidden; users who want that subscription need to select “see all plans” in order to dredge it up. With Helfstein noting that removing Basic worldwide would open up about another $4.4 billion in revenue per year, it’s safe to say that Basic’s days may be numbered.
However, as a whole, analysts are somewhat split on Netflix’s overall course. Netflix stock is currently a Moderate Buy by analyst consensus, supported by 19 Buy ratings, 13 Holds, and three Sells. However, Netflix stock also comes with 6.88% downside risk thanks to its average price target of $403.03 per share.
