Jim Cramer Defends Netflix Stock After 40% Plunge

Jim Cramer, the well-known financial analyst, is defending Netflix (NFLX) after the stock plunged more than 40% over the past year. In an interview on CNBC on July 20, Cramer said the stock is now undervalued after the sharp decline.

Recommendation Change

Cramer did not formally change his rating, but he indicated that at current levels, the stock represents a buying opportunity for long-term investors. He had previously recommended buying at higher levels.

Analyst's Rationale

Cramer believes Netflix still has a strong competitive advantage in streaming, with a large subscriber base and premium original content. He thinks the recent sell-off is overdone, especially as revenue continues to grow.

Context

The stock fell after the company reported Q2 results that missed Wall Street expectations for subscriber growth. Increasing competition from Disney+ and Amazon Prime is also weighing on the stock. However, many other analysts remain neutral or positive on the stock.

Conclusion

The stock remains under pressure in the near term, but Cramer's defense could boost some investor confidence. Investors should weigh risks and opportunities based on actual company performance, not just analyst opinions.