Stacy Widlitz at Pali Capital tees up Netflix, which reports this afternnon. In a note (reg. required) published today, she warns that while the company while should hit its Q4 guidance, it’s doing it by “adding fewer subs and cutting marketing; this is not a sustainable business model.”
“We continue to be negative on the stock,” she writes. “We would avoid the stock and sell on any strength.”
Widlitz argues that cable/satellite VOD, Apple rentals, as well as other retail will continue to eat into Netflix’s rental mail model, and the announced Netflix-LG set-top box “will be a disaster as consumers will not pay for this.”
We’ll be covering the NFLX earnings call live; check back on this post for a link to our coverage.
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