Netflix (NFLX) Stock Lower, Wedbush: Sell Ahead of Earnings

Netflix (NFLX) stock is declining on Monday afternoon as Wedbush believes investors should sell the stock now.
By Kaya Yurieff ,

NEW YORK (TheStreet) -- Shares of Netflix (NFLX) - Get Report are down 0.69% to $96.39 in midday trading Monday as Wedbush believes investors should sell the stock now, Barron's reports.

The Los Gatos, CA-based internet streaming service is scheduled to report 2016 second quarter results after the market close on July 18.

The firm said that although second quarter results could beat analysts' estimates, the company's third quarter forecast will likely be weak, Barron's added.

Due to an increasingly competitive landscape, Netflix has a challenging outlook ahead, Wedbush noted.

The firm expects the stock to continue bleeding cash "for the foreseeable future."

Additionally, Netflix's high valuation is unwarranted due to the possibility of slowing domestic growth and "consistently elusive" profitability abroad, Wedbush said.

The firm has an "underperform" rating and $45 price target on Netflix shares, Barron's noted.

Separately, TheStreet Ratings Team has a "Hold" rating with a score of C+ on the stock.

The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and solid stock price performance.

But the team also finds weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow.

You can view the full analysis from the report here: NFLX

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