Technology has pulled the Wall Street bandwagon in the last five years, leading the American indices to pulverize all-time highs year after year. However, the fear of a slowdown in economic growth, the Fed’s monetary tightening, inflation and disparate results have put the sector on fire and led big tech to squander close to 1.5 trillion euros on the stock market. dollars in April.
The company that has fared worse than the most famous acronym in recent years, (Facebook, Alphabet, Netflix and Amazon) is . The streaming platform, which at the beginning of 2022 was among the ten largest companies in the world, has given up its pedestal in the Olympus of technology and, with a value of 88,800 million, now occupies the 29th position.
Deterioration of recommendation…
Netflix already fell out of favor with the experts in January and, despite the 68% decline that it accumulates in the year and the fact that its titles are now bought 60% cheaper by their earnings multiplier (PER) than in January , consensus analysts have continued to downgrade their advice to a hold that is closer to selling than buying.
On the contrary, the experts have reaffirmed or improved their purchase recommendations for , , and , and their titles are bought (with the exception of the online commerce giant, which distorts the average) with a discount of 19% for 2022 and 16, 5% by 2023 compared to the estimate at the beginning of the year.
… and estimates
The company led by Reed Hastings is experiencing its lowest listed hours since it reported to the market two weeks ago that it was the first drop in subscribers in more than a decade.
A wake-up call that has not gone unnoticed by investors (Netflix is the most bearish of the S&P 500 in 2022 and is trading at 2017 lows) or by analysts, who have applied severe adjustments to their estimates.
Consensus analysts have continued to downgrade his advice to a hold
The consensus now sees Netflix’s net profit for 2022 as 0.4% lower than forecast before the results, and cut by 15% and 18% for 2023 and 2024, respectively.
Thus, in the year the estimated earnings for this year are 18% below what was expected on January 1, while the forecast for the following year has fallen by about 29% and that of 2024, 31 .6% It is the biggest hack among its comparables.
“Netflix has formally announced operating margins of between 19% and 20% in 2022 and 2023 (i.e. roughly flat from 2021), which is a significant drop from previous guidance of 300 basis points of expansion of the operating margin each year”, stand out from Needham.
The Netflix debacle in recent months is such that the term GAFAM has already begun to be discussed by excluding the audiovisual content platform from the acronym and incorporating , the second most valuable firm after Apple.
“Since the beginning of the year, the decline in the prices of these five companies is equivalent to approximately twice the decline of the S&P 500. However, the success of these giants is based on innovation and growth and it seems that there are many ways to recover this path: cloud, metaverse or hardware innovation,” says Olivier de Berranger, chief investment officer and head of asset management at French fund manager La Financière de l’Echiquier.
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