Goldman Sachs Tells Market: Sell Netflix, Roblox And eBay Stocks

This year's tech stocks have been hammered. The Nasdaq has dropped more than 26%, putting it in bear market territory. Unfortunately for investors, Goldman Sachs analysts predict additional pain for some institutional brands, Paul R. La Monica reported for CNN Business.

Photo Insert: Netflix was downgraded by Goldman Sachs analysts due to "concerns about the impact of a consumer recession as well as heightened levels of competition," and the company is now a "show-me story."

On Thursday, Goldman Sachs analysts lowered Netflix, eBay, and gaming/metaverse powerhouse Roblox to "sell" ratings.

The downgrades came after Goldman Sachs analysts chose to consider a greater probability of a tougher economic environment and firmly lower revenue growth...to reflect broader industry maturing, according to the analysts.

In other words, Netflix, Roblox, and eBay are catching up to them due to cost hikes, greater competition, and the fact that consumers are less concerned about Covid and are leaving their homes more frequently rather than staying put.

Netflix and eBay both lost 5% of their value on Friday, while Roblox lost 9%. Netflix was downgraded by Goldman Sachs analysts due to "concerns about the impact of a consumer recession as well as heightened levels of competition," and the company is now a "show-me story," according to the analysts.

There are growing concerns that cash-strapped consumers may find themselves paying for too many streaming services and need to cut back.

Netflix is no longer the sole streaming option, with Disney, Amazon, Apple, Paramount, Comcast, and CNN's parent company Warner Bros. joining the fray. All of the Discovery Channels have their own services with unique content.

Roblox is still "the best positioned company in the gaming/interactive entertainment" market, according to Goldman Sachs, and has significant "long-term secular growth opportunities," but there are "increasing concerns around the post-pandemic environment" for Roblox. In the short term, Goldman analysts forecast "slowing growth."

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