Wolfe, Rosenblatt unimpressed by Netflix's password-sharing crackdown
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Brokerage Wolfe downgraded Netflix (NASDAQ:NFLX) from Outperform to Peer Perform, citing concerns about the company's 2024-2025 growth outlook.
Shares of the streaming video giant fell nearly 2% in premarket trading. Its shares have risen over 22% YTD. 
Rosenblatt maintained its Neutral rating and $400 PT on NFLX, noting that its survey suggested that the company's crackdown on password sharing should have been higher. 
Wolfe added that its prior Outperform rating assumed NFLX "leading the industry transition from landgrab to efficiency" by capitalizing on existing viewership through ad-based plans and a crackdown on password sharing. 
According to Wolfe, if future growth fails to live up to expectations, NFLX's 50% P/E and 70% EV/EBITDA premium to the S&P would be harder to justify. 
According to Rosenblatt, its survey work suggested that at least ~40% of users sharing accounts were likely to convert to paying, something that did not reflect in its second-quarter results.
Rosenblatt added that its check of Netflix operating data into the third-quarter showed mixed results, suggesting some caution into the report. 

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