The Zhitong Finance App learned that the research company Seaport Global Securities downgraded the rating of Netflix (NFLX.US) from “buy” to “neutral”. Since Netflix's stock price hit Seaport's previously set target price of 576 US dollars, the agency can't help but wonder whether the current valuation is too high compared to the company's fundamentals, and whether market participants will buy at that price in the future.

Even with the most aggressive advertising scenario, where 50% of users use a tier that includes ads, Netflix's stock price still has room to rise by about 6% compared to the current level. Seaport said most of the implicit possibilities brought about by the advertisement made Netflix's current valuation “far above the normal range” because its current share price means a permanent growth rate of 6.7%, while Seaport expects its growth rate to be 3%.

Furthermore, Netflix recently pointed out the impact of negative foreign exchange factors on its business, including the sharp depreciation of the Argentine peso against the US dollar.