Netflix Analyst: #CancelNetflix Campaign Makes September A Key Month

Netflix Inc NFLX shares are down 6.5% so far in September, in part due to the #CancelNetflix campaign triggered by the controversial French movie “Cuties.”

Netflix’s monthly churn increased slightly in August, but September will be the most important month of the quarter for Netflix, BofA Securities analyst Nat Schindler said in a Tuesday note. 

August data from ANTENNA suggests Netflix’s churn was 2.97% for the month, up from 2.72% in July and 2.93% in August 2019, the analyst said.

SimilarWeb data for the month suggests global cancelation queries were down to 1.11% in August from 1.67% in July and 1.27% in August 2019, he said. 

Finally, download data from SensorTower indicates that Netflix downloads were down 3% year-over-year and 4% month-over-month in August.

Critical September For Netflix: The August data is good enough overall to support a potential subscriber beat when Netflix reports third-quarter earnings, Schindler said. 

The September numbers will be critical, the analyst said. 

“We believe the data within this report is supportive of potential upside to guidance at 2.5mn q/q paid sub adds in 3Q, though with the launch of Disney+ in Indonesia, Belgium, Portugal and the Nordic region as well as recent backlash over a controversial Netflix original series, September will be the most important month in 3Q.” 

BofA Securities has a Buy rating on Netflix with a $575 price target. 

Benzinga’s Take: Early September churn data from YipitData doesn’t bode well for Netflix. YipitData said this week that Netflix’s churn rate started to spike following the release of “Cuties” and reached levels eight times higher than August levels in the first half of September.

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Photo courtesy of Netflix.