Dawson James Starts Netflix (NFLX) at Sell, Sees Rising Costs and Increased Competition

July 5, 2011 9:50 AM EDT
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Price: $138.35 -0.18%

Rating Summary:
    33 Buy, 23 Hold, 9 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 22 | Down: 17 | New: 13
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Dawson James initiates coverage on Netflix (NASDAQ: NFLX) with a Sell and $181 downside price target.

The firm highlights:
1): Average monthly revenue per paid subscriber fell 8.7% from $13.30 in FY2009 to $12.19 in FY2010
2) increased competition from Hulu, Amazon (Nasdaq: AMZN), Facebook, and Google (Nasdaq: GOOG).
3. Acquiring streaming television content will likely continue to become more expensive
4). Inexpensive and unlimited bandwidth are key drivers of success for Netflix’s streaming service. Level 3’s (Nasdaq: LVLT) recent announcement of the acquisition of Global Crossing (Nasdaq: GLBC) represents a possible shift in pricing power towards the content delivery network providers.

Shares of Netflix are off the highs on the new Sell rating but are still sharply higher after announcing a deal today to expand in Latin America.

For more ratings news on Netflix click here and for the rating history of Netflix click here.

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