New York - Not even Jim Cramer will recommend Netflix stock anymore. Jim Cramer the popular figure on Wall Street and host of Mad Money on CNBC said that Netflix on Thursday finally reached a price that was to high and he could no longer recommend the stock. Since Thursday morning Netflix stock is down a staggering 12%.
There are some reasons to not like Netflix stock at the moment. Particularly the fact that the company only earns 8% profit for every dollar of revenue which is above Wal-Mart but not by much. It means that Netflix will have to grow rapidly in size to increase earnings. This is likely because of the high costs associated with showing Hollywood films and other movies. The producers of these movies want a large stake in the profit which limits Netflix's margins.
Netflix was one of the few stocks that finished the down on Monday. Traders are weighing the possibility that the stock may in fact be overvalued.
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