Netflix less compelling than Disney, Alphabet: Analysts

Thomas Martin, senior portfolio manager at Globalt Investments, and Tom Essaye, founder of Sevens Report Research, discussed why Netflix (NFLX) is less compelling than Disney (DIS) and Alphabet (GOOGL) in the media/entertainment space. They spoke with Yahoo Finance Executive Editor Brian Sozzi ahead of Netflix's Q2 earnings report due Thursday after the close.

Recommendation Change

No official rating change was announced, but the analysts indicated Netflix faces challenges that make it less attractive compared to Disney and Alphabet.

Analyst Rationale

The analysts believe Disney benefits from strong content and diversified assets including parks and streaming, providing multiple revenue streams. Alphabet (Google) boasts a powerful advertising platform and diversification into cloud and AI. In contrast, Netflix relies heavily on subscriber growth in a highly competitive market.

Context

Netflix (NFLX) shares have declined about 5% over the past month, while Disney (DIS) gained 3% and Alphabet (GOOGL) rose 4% in the same period. Other analysts expect Netflix to add 4 million subscribers in Q2, but competitive pressures from Disney+ and others remain.

What to Make of It (Neutral)

The analysts' views do not constitute a buy or sell recommendation, but highlight that investors may find better opportunities in Disney and Alphabet due to their business diversity and market strength.