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Netflix bulls felt as smooth as Don Draper of Mad Men in the first quarter of this year, only to then find themselves as lonely as Steven Van Zandt’s character in Lillehammer in the second quarter.
As the first half of the year comes to a close, the streaming movie company had the biggest negative about-face in the second quarter of any stock in the S&P 500 . The stock was nearly a double at its high in February, but has since crashed 50 percent. It’s now down for the year.
“It’s a busted growth stock,” said James Lebenthal of Lebenthal Asset Management. “Even after this price decline, Netflix is still trading at 35 times next year’s earnings. They’ve lost the trust of the growth stock community. Once these things break, it is hard for them to find love again.”
Netflix lost that love by giving a disappointing outlook for streaming subscribers in April. The company said net streaming subscriber adds would only be as much as 790,000, whereas analysts were expecting more than one million.
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