Canaccord downgrades Netflix to Hold on limited growth catalysts

Canaccord downgraded Netflix to Hold from Buy with a price target of $585, down from $720. Netflix last night reported Q1 results that were ahead of expectations, with revenue benefiting from another quarter of strong member additions as the company continues to scale its paid sharing offering, and profitability came in ahead of guidance, the analyst tells investors in a research note. Despite these “mostly solid results and outlook,” the firm sees limited growth catalysts for the next few quarters and with the stock up 90% over the last 12 months, it thinks investors “may be well served to look elsewhere for upside.” Netflix’s paid sharing likely meaningfully pulled forward member growth and reduced subscriber disclosures add to the uncertainty, contends Canaccord.