Industry analyst have predicted that streaming platform, Netflix’s investors will have plenty to worry for in 2023 despite it’s 65 percent stock increase since July.
According to Wall Street analyst, Needham’s Laura Martin, the stock will battle several headwinds in the new year including slowing subscriber growth and increased pressure on its key financial metric, average revenue per user, or ARPU.
The recent surge, however, did not seem to persuade Martin, who wrote in her note that “Churn is rising for all [over-the-top platforms], suggesting that NFLX’s peak subs may be behind it.”
If Netflix reports subscriber increase in 2023, she continued, those customers would probably originate from low-ARPU foreign locations, while subscriber losses will come from high-ARPU regions like the United States and Canada, which will have an adverse effect on revenue growth.
The analyst reduced her full-year 2023 sales forecast by 7% to $33.4 billion while maintaining a Hold rating on the stock. She also reduced forecasts for adjusted EBITDA to $6.5 billion and GAAP EPS to $9.31, representing reductions of 15% and 20%, respectively, from the firm’s most recent estimates.