Streaming giant Netflix (NFLX) recently launched a price hike, and as you might expect, this did not go over well with the people who actually pay for those subscriptions. Comments ran the gamut, pointing out issues of timing, of value delivered, and of course, just general concern about surging prices on seemingly everything. Investors smelled a revolt afoot, and sent Netflix shares down fractionally in the closing minutes of Thursday’s trading.
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The fact that Netflix recently landed a hefty $2.8 billion payday to walk away from the merger deal with Warner Bros. Discovery (WBD) was not lost on some subscribers, who wonder why Netflix suddenly needs more money from customers with such a huge payday on the way. Some also point out that the ad-supported tier was supposed to, from the beginning, offer a way to get access to Netflix content when the ad-free tiers were too expensive.
Now, with a price hike on even ad-tier, that dream seems all but dead. Some even pointed out, not incorrectly, that the ad-supported tier costs what the ad-free tier cost back in 2015, and for a much worse experience overall. Thus, customers are paying more, getting less, and already considering canceling service in favor of one of several other providers.
Polish Expansion
Some of that new cash, meanwhile, will be going into an expansion project Netflix recently revealed. Netflix recently opened a new office in Warsaw, Poland, which comes just 10 years after it brought Netflix service to Poland altogether. This is actually Netflix’s first, and only, “…technology hub outside the United States.”
The new office will offer up not only technical support, but also support for the growing Eastern European market, which is generating a growing amount of Netflix’s overall content picture. Netflix co-CEO Greg Peters noted, “Poland is home to outstanding creative talent, and together with our partners, we’ve brought some of the country’s best stories to audiences across Central and Eastern Europe. At the same time, our engineers here are building cutting-edge innovation, supporting how films and series are made, managed and delivered to more than half a billion people worldwide. We’re excited to expand our presence in Poland and can’t wait for what comes next.”
Is Netflix Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 30 Buys and 11 Holds assigned in the past three months, as indicated by the graphic below. After a 0.19% rally in its share price over the past year, the average NFLX price target of $113.97 per share implies 22.59% upside potential.
