Veteran trader turns heads with Netflix comments

When in Rome, you may want to avoid the Colosseum.

Back in ancient times, the Romans used the massive amphitheater to stage all kinds of spectacles, including gladiator contests, so sitting in the cheap seats was a good way to ensure you’d make it home for dinner.

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Running a successful company can feel a bit like walking into an arena, although the body count tends to be a little lower. Nevertheless, survival of the fittest is still the No. 1 rule.

Streaming giant Netflix  (NFLX)  has been taking on all comers over the years. The Los Gatos, Calif., company. founded in 1997 as a mail-order-DVD-rental operation, began offering streaming services a decade later.

TheStreet Pro’s Stephen Guilfoyle remembers those early days, when he took short positions on Netflix a few times when the company faced serious competition in the streaming space.

Rivals included Disney+ and the Disney  (DIS)  bundle that came with Hulu and ESPN+. Comcast’s  (CMCSA)  Peacock and Paramount Global’s  (PARA)  Paramount+. 

Greg Peters, Netflix co-CEO, oversees the streaming giant with Ted Sarandos.

Bloomberg/Getty Images

Trading veteran: Netflix ‘a lesson painfully learned’

“In came a host of competitors with their own legacy-driven portfolios of content,” the veteran trader said in his recent column. “How could Netflix have not been overpriced as those kinds of players entered into an arena that had been dominated by one name?”

Yet in those early days, each and every time Guilfoyle played Netflix from the short side (betting on a stock-price drop) going into the earnings report, he ended up spending weeks managing risk, doing his best to minimize the damage.

“Damage done as Netflix sped off into the sunset and laughed at my foolishness,” he said. 

Gradually, Guilfoyle, whose career dates to the floor of the New York Stock Exchange in the 1980s, learned to avoid shorting Netflix.

But don’t get him wrong, as he’ll trade anything from either side on a short-term or momentum-driven basis, “from Netflix to hubcaps to baseball cards.”

“That said, I haven’t shorted Netflix as an investment for years now. That was a lesson painfully learned,” Guilfoyle said. “Much to my amazement, Netflix is still the king of streaming entertainment as legacy media continues to rot from within.”

“While those competitors watch their legacy businesses erode, they all struggle to run their streaming operations profitably,” he added. “Netflix? Yes, Netflix keeps on growing its subscription base and keeps on posting chunky numbers for profitability. Quarter after quarter.”

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Guilfoyle tipped his cap to Executive Chairman Reed Hastings for never losing focus and took off his hat to Co-CEOs Ted Sarandos and Greg Peters, “who took on the roles of day-to-day leadership two and half years ago now without the firm ever skipping a beat.”

He suggests: “Take some profits if one is already long? We always like to take the principal out of long positions if we can and get down to house money. I won’t be getting short this name. Been there, done that.

“Would I buy the shares if there were to be a period of consolidation?” he asked. Using technical analysis he says yes — but “a lot lower … at $1,078 right now.” The stock closed June 5 regular trading up 0.9% at $1,250.52.

Shares of Netflix, which recently wrapped up its Tudum 2025 fan event, are up about 41% in 2025 and have nearly doubled (up 93%) from a year ago.

Analyst: Netflix ‘a top performer in our coverage’ 

Several investments firms recently issued research reports on Netflix, including Bank of America Securities, which raised the its price target on the company to $1,490 from $1,175 and kept a buy rating on the shares.

“Netflix has been a top performer in our coverage, and we continue to view the company as well-positioned moving forward,” the firm said in a research note.

B of A said it still saw Netflix as “well-positioned given the company’s unmatched scale in streaming.” It has “further runway for subscriber growth, significant opportunities in advertising and sports/live and continued earnings and free cash flow growth.” 

The return of Netflix’s three most watched series — “Squid Game” on June 27, “Wednesday” on Aug. 6 and “Stranger Things” in the second half — alongside new releases support healthy subscriber retention and growth, the firm said.

“Finally, key live events such as boxing from Madison Square Garden (produced by Most Valuable Promotions/Jake Paul), and strong NFL Christmas Day matchups will boost Netflix’s ad-supported efforts,” B of A said.

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Evercore ISI raised its price target on Netflix to $1,350 from $1,150 and affirmed an outperform rating following US and UK survey work.

Netflix is facing a “very large” total addressable market of $650 billion-plus global entertainment revenue, excluding China and Russia, of which it still accounts for less than 10% share, the firm said, according to The Fly. 

Evercore says the company has an “extremely strong and growing value proposition” and an “excellent track record of innovation.” 

Netflix’s business model has been inflecting up with wider operating margins and more free cash flow, enabling it to buy back shares and eventually pay a dividend. 

“In the event of a recession, Netflix’s $7.99 ad-supported offering might be the single greatest entertainment value in the land,” Evercore said, saying that the core Netflix metrics it monitors were mixed to positive in both the US and the UK.

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