2-Star Stocks Poised to Plunge: Netflix?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, movie rental service Netflix (Nasdaq: NFLX) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Netflix and see what CAPS investors are saying about the stock right now.

Netflixfacts

  
Headquarters (founded)Los Gatos, Calif. (1997)
Market Cap$3.5 billion
IndustryInternet retail
Trailing-12-Month Revenue$3.5 billion
Management

Founder/Chairman/CEO Reed Hastings

CFO David Wells

Return on Capital (average, past 3 years)32.7%
Cash/Debt$813.3 million / $400.0 million
Competitors

Apple

Comcast

Amazon.com


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 18% of the 9,609 members who have rated Netflix believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those bears, fellow Fool Nathan Alderman (TMFNato), touched on the strong competitive headwinds working against Netflix:

I love Netflix. It seems powerfully and passionately engaged in trying to give its customers what they want, at a fair and honest price. Its streaming catalog is chock-full of stuff I want to watch, and I'm very excited about its original series. But it's changed its business model in an inevitable and unfortunate way. Its shift from discs to streaming has gutted its moat, turned its former customers into bitter enemies, and left it with much fewer ways to differentiate itself from a host of rivals swarming over the industry's newly lowered barriers to entry.

Of course, that short pitch doesn't even come close to telling the entire story for Netflix. You're in luck, though. The Fool's brand-new premium report on Netflix tells all sides of the story for one of the most compelling tech companies in the world. You can grab your copy now, which comes with free updates for 12 months -- just click here.

Want to see how well (or not so well) the stocks in this series are performing? Follow theTrackPoisedToCAPS account.

The article 2-Star Stocks Poised to Plunge: Netflix? originally appeared on Fool.com.

Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. The Motley Fool owns shares of Netflix, Apple, and Amazon.Motley Fool newsletter serviceshave recommended buying shares of Netflix, Apple, and Amazon.Motley Fool newsletter serviceshave also recommended creating a bear put ladder position in Netflix and a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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