Netflix Inc is thinking global but needs to act more local to realize its full potential, analysts said after the company's subscriber forecasts came up short of expectations. The company's high-flying stock, up by a third in the past 12 months, closed down nearly 13 percent at $94.34 on Tuesday. That was the stock's biggest one-day drop since October 2014.
The video streaming pioneer launched its service in almost every country in the world in January, further boosting investors' expectations about the company's growth prospects. However, Netflix on Monday forecast US and international subscriptions would grow at a slower pace than Wall Street expected this quarter, underscoring the troubles it is grappling with as it adapts the service to different markets and cultures. "We believe this highlights the increasing challenges facing the company as it expands into more non-English speaking countries and countries with more localised content," said Mizuho analyst Neil Doshi, who rates the stock "neutral."
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