Still Bullish on Netflix (NFLX) Stock, Says Foundation Capital's Holland to CNBC
NEW YORK (TheStreet) -- Foundation Capital Partner Paul Holland remains bullish on Netflix (NFLX) - Get Report stock despite the video streaming service reporting weak 2016 second quarter subscriber growth earlier in the week, he told CNBC's Jon Fortt on "Squawk Alley" Friday.
Netflix reported on Tuesday 1.7 million subscribers were added in the second quarter, compared to its estimate of a 2.5 million subscriber growth. This was attributed to the company's $2 monthly subscription hike.
"Netflix is still in the very early stages of conquering a very, very large content market worldwide," Holland argued, adding that CEO Reed Hastings "in my opinion is the best CEO in the United States today."
The company's ability to create content and innovate are reasons Holland advised investors to be long Netflix.
"So when I look at what they're going to do, the trades are going to go up and down, they're going to have some temporary aberrations, whatever they may be" but ultimately the stock will perform well, Holland predicted.
Despite competing in an "enormous" market, the company's push into "regional content" will also help Netflix stay strong, he added.
"Again, trades are going to come and they're going to go. People are going to have some seasonal favorites in that perspective but over the long run, if you've been involved in Netflix as an investor, as we have, you've been very very happy," Holland concluded.
Shares of Netflix are declining 0.21% to $85.81 this afternoon.
Separately, TheStreet Ratings rated Netflix as a "hold" with a score of C+.
The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, TheStreet Ratings also finds weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.
You can view the full analysis from the report here: NFLX
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.