Investment firm Phillip Securities just downgraded video streaming giant Netflix (NFLX) from Hold to Sell due to the stock’s recent rally. Indeed, analysts led by Helena Wang believe that the current share price looks too expensive based on the company’s fundamentals. Therefore, even though Netflix is still a strong business, the firm believes that the stock is now overvalued and due for a pullback. Interestingly, one of the major concerns for Wang is that engagement per viewer is declining, which could hurt Netflix’s plan to double its ad revenue in 2025.
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It is worth noting that the company is still adding new subscribers at a fast pace, as revenue increased by 14% in the first half of 2025. However, with more users signing up, the average time spent watching per person is dropping. That means fewer ad impressions per user, which makes it harder to grow ad revenue. In addition, some of this lower engagement might be due to Netflix cracking down on password sharing, which splits casual viewers into separate accounts that don’t watch as much.
Nevertheless, Phillip Securities still sees Netflix as a strong company with steady earnings and little exposure to tariffs. It states that Netflix continues to lead in the video streaming space due to its pricing power and a wide variety of content. Even so, it maintained its price target at $950, which suggests that the stock could fall by more than 21%. For context, Netflix stock is up 36% so far in 2025, well ahead of the S&P 500’s (SPY) 7.7% gain.
Is NFLX Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 26 Buys, 11 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NFLX price target of $1,391.88 per share implies 14.9% upside potential.
