Barrons Edition said Netflix Stock Has Fallen From 2023 Highs

Barrons Edition says that Netflix NFLX +2.60% (ticker: NFLX) shares have gained 1.4% this year, outperforming the S&P 500SPX –1.04%, which is up 0.2% in the same period. However, this is a 19% decline from the stock’s highs in January.

Stocks have taken a hit this week following the closure of Silicon Valley Bank, as investors fear the future of the financial industry and the economy. Despite those concerns, Oppenheimer analyst Jason Helfstein is confident about the future of Netflix and says the current pullback in its share price creates a great buying opportunity.

After fourth-quarter results, the stock initially rose and then started to sell off “on fears around higher churn from enforcing password sharing, slower ad launch, and Fed fears,” Helfstein said to Barrons Edition.

Netflix intends to crack down on password sharing to get users from different households to pay for individual accounts, as opposed to sharing one. This is an attempt to drive revenue, but debate remains whether this will upset subscribers, driving them to other streaming services.

Helfstein has confidence in the password-sharing crackdown.

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“We believe nothing has changed from our original thesis: advertising increases the total addressable market, content competition is easing, and paid account sharing will be a long-term tailwind,” Helfstein wrote in a research note.

He maintained his Outperform rating on the stock and $415 price target. If the crackdown on account sharing is a success, Helfstein thinks it can represent a $2 billion to $8 billion upside in revenue.

Shares of Netflix were up 1.8% Wednesday to $300.31.

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