One of these stocks is not like the others. One of these stocks doesn't belong.
Or so the song goes.
And in the eyes of Real Money's Stephen "Sarge" Guilfoyle Netflix is a stock that should be traded and not invested in since it is no longer a growth stock.
While Netflix is increasing its revenue, the streaming company’s stock was valued like a growth stock even though it is not one, he wrote in a recent Real Money Pro column.
“Netflix is a trader now, not an investment,” Guilfoyle wrote recently. “Netflix is no longer part of FANG, no longer a true ‘growth’ name. Oh it's growing, but it is not a ‘growth’ stock.”
The company is still adding subscribers, just at a lower growth rate.
Netflix had estimated it would only add 2.5 million new subscribers for the first three months of 2022, which is a far cry from the 4 million that Wall Street was expecting, he wrote. Netflix added a total of 8.3 million subscriptions for the last three months of 2021.
Netflix also admitted that its competition could be hampering its growth potential.
“... in a revelation that I don't know Netflix had ever had to make before... stated that this competition ‘may be affecting our marginal growth,.’” Guilfoyle wrote.
The company’s operating margin fell by 8% for the fourth quarter, a decline of six percentage points even though it spent less money on creating more shows and movies.
Guilfoyle is long Netflix along with its competitors, Disney (DIS) , Apple (AAPL), Amazon (AMZN) and ViacomCBS (VIAB).
Netflix is also increasing its monthly subscription prices like Disney.
