It's lone 3 months into 2022, and immoderate pure-play media companies are having a terrible year.
How terrible? Losing-half-market-cap bad.
Shares of Netflix are down a startling 67% twelvemonth to date, pressured by another disappointing quarter for subscriber maturation and a anemic outlook. The streaming elephantine is present successful cost-cutting mode — Meghan Markle's animated bid 'Pearl' is present disconnected — successful an effort to boost profits with its apical enactment slowing.
"Netflix is simply a maturation company, but nary longer a premium maturation company," seasoned tech expert Mark Mahaney astatine Evercore ISI told Yahoo Finance Live connected April 20 (video above).
Other media carnage isn't excessively hard to spot.
Roku besides served up little than sterling archetypal and 2nd 4th outlooks, pushing its banal diminution twelvemonth to day to 56%.
Meanwhile, Spotify's banal has cratered astir 55% arsenic its first 4th besides failed to impressment Wall Street.
The lone comparative outperformer successful media has been Paramount.
Shares are up somewhat this twelvemonth amid momentum down its caller streaming platforms Paramount+ and Pluto arsenic good arsenic nett tailwinds from astir 2 years of outgo cuts.
Chat up Wall Street pros and they constituent to a fewer reasons for the minimal enthusiasm for media stocks.
First, media stocks are being viewed arsenic tech stocks — and tech has been battered connected fears of rising involvement rates from the Federal Reserve. Hence, the assemblage looks overvalued.
"I presumption Apple, for instance, arsenic being priced for assertive assumptions starring into the future, but not implausible assumptions," Research Affiliates Founder Rob Arnott recently said connected Yahoo Finance Live. "It's precise imaginable the maturation volition warrant the terms — not truthful for Tesla, Facebook, Netflix and Amazon. A batch of these are priced for implausible semipermanent growth."
Secondly, the media landscape's gains during the pandemic are not proving to beryllium sustainable arsenic the pandemic has waned.
"This conception of pull-forward of request during COVID and however overmuch request was pulled guardant from erstwhile years and is going to person to benignant of beryllium fixed backmost [is a concern]," UBS strategist Stuart Kaiser. told Yahoo Finance Live connected Monday (video above) "And I deliberation a Netflix volition benignant of autumn into that category."