Netflix (NFLX) is past its prime.
Shares of the streaming media giant crashed nearly 40% on Wednesday as the company uncorked another disappointing quarter, sparking fresh worry on the Street about future growth potential.
“I think its best days are behind it,” said Macquarie tech analyst Tim Nollen on Yahoo Finance Live.
Nollen is one of the few analysts on Wall Street to downgrade Netflix shares ahead of the company’s latest results. And Nollen’s call looks to be spot on.
Here’s how Netflix performed compared to Wall Street analyst estimates:
Revenue: $7.87 billion vs. $7.95 billion expected, $7.16 billion Y/Y
Earnings per share: $3.53 vs. $2.91 expected, $3.75 Y/Y
Net subscribers: -200,000 vs. +2.51 million expected, +3.98 million million Y/Y
For the current quarter, Netflix said it expected an even steeper decline in new users as it battles through increased competition from the likes of Apple and Paramount and tries to get 100 million account sharers to pay up.
The streaming service is modeling for subscribers to decline by 2 million in the fiscal second quarter, whereas consensus analysts were looking for a gain of 2.4 million.
Nollen is standing by his Sell rating on Netflix even in the wake of the stock’s plunge.
“We certainly are avoiding the stock and selling the stock for now,” Nollen said. “Eventually, if they can turn this around there is still a good growth opportunity for them — particularly internationally.”