Analyst Says Coronavirus Is Actually Bad For Netflix

Stranger Things

As health officials urge people to stay home and work remotely, it’s easy to assume that it’d bode well for companies like Netflix that offer seemingly endless at-home entertainment for a monthly subscription fee. But if one analyst is to be believed, that might not be the case at all. While it might be true that many people might stay in and binge watch shows during the outbreak, Needham analyst Laura Martin told Yahoo! Finance that, despite Netflix’s stocks holding steady for now, she believes the virus will eventually affect the popular streaming service.

Martin says that Netflix is a luxury, and as the coronavirus continues to wreak havoc across the world, more and more people will be forced to work from home or take time off work due to infection. With a worldwide dip in monthly cash flow, it may prove harder and harder for some families to justify Netflix’s monthly charge. As much as Netflix‘s 61 million subscribers might want to watch their favorite shows for the hundredth time, customers financially struggling are far more likely to cut entertainment in favor of putting food on the table, and rightfully so.

Martin stated plainly:

Italy just quarantined its entire country implying millions of travel employees are not going to work or get paid, and travel globally has declined precipitously. Since NFLX is a luxury, we assume international churn will rise and offshore revenue growth will slow until COVID-19 retreats.

The COVID-19 coronavirus is causing global panic as it continues spreading rapidly worldwide. Soap and hand sanitizer are flying off shelves, bottled water feels like a commodity in some places, manufacturing is getting slammed with delays, major events are being postponed or shut down, and the stock market is seeing a fairly substantial dip. The virus was officially declared a pandemic by the World Health Organization today after infecting 118,000 and killing over 4,000 people across 114 countries. Though cases in its origin country of China have slowed down, it has seen a substantial uptick in Italy and the United States. Unfortunately, there is currently no vaccine and no signs of it slowing down yet.