Analyst Note| Neil Macker, CFA |
Netflix started 2021 with weak first quarter subscriber growth, below our estimate and the relatively conservative guidance issued in January. The subscriber pull forward in the first half of 2020 and the global increase in competition appear to have stunted net additions. Second quarter subscriber guidance is also very weak: 1 million net adds would be one of the lowest quarters ever for Netflix. We continue to think that the expansion of Disney+, HBO Max, and other services will increase churn and pressure gross adds for Netflix over the near future. We maintain our narrow moat and fair value estimate of $250.