Netflix could be in trouble as analysts fret over company's growth

Shares of the streaming service fell more than 4% during Wednesday's intraday trading, and head analyst John Janedis believes that the company's growth may not be as rapid as first expected.

Shares of the streaming service fell more than 4% during Wednesday's intraday trading

Following the UK's referendum to leave the European Union, and increased difficulties in its international base, the news couldn't have come at a worse time for Netflix.

"While we recognize the offering’s global appeal and growth opportunity, and respect what Netflix has built, we think it will take longer than expected for the company to reach the long-term targets set for the US,” Janedis wrote.

The company recently announced a price rise for its subscriptions, leading to fears that its total subscribers could drop significantly. They say they had almost 47mn users in its first quarter results.

What could harm Netflix the most is the array of competition becoming available in the on-demand television service.

“We continue to believe that U.S. content owners will become more selective in monetizing content through [subscription video on demand], favoring deals with Hulu and other platforms and increasingly retaining content for owned platforms,” Janedis wrote. “As Netflix relies less on licensed content, this could put incremental pressure on maintaining the quality of original programming in order to sustain viewership.”

As well as in the US, international markets have become more saturated, and as a result they must spend more on localised content and original programming to stay ahead of the game.

On a positive note, Netflix said it reached a deal with Comcast that will see the cable company include Netflix on its proprietary X1 set-top box. No details were disclosed, but the deal broadens Netflix’s reach to Comcast’s 22.4 million TV subscribers.