A sputtering economy, implosions at financial institutions, or just plain bad management -- on any given day, investors can name a number of reasons to sell a stock. Yet while panic is never beneficial to investors, it's good practice to play devil's advocate with investments from time to time.
In Motley Fool CAPS, more than 120,000 members have weighed in on nearly 5,400 stocks, sharing bullish and bearish opinions alike.
In the case of movie subscription service provider Netflix (Nasdaq: NFLX ) , a total of 6,440 members have weighed in on its chances of success. I've already plucked out some of the bullish rationale backing Netflix today, so here are three counterpoints to consider, courtesy of CAPS:
Heavy competition: Netflix faces threats from not only Blockbuster's (NYSE: BBI ) Total Access, but also McDonald's (NYSE: MCD ) and CoinStar-owned RedBox DVD rental kiosks. Many investors see this competition, as well as online movie rentals from Amazon.com (Nasdaq: AMZN ) and Apple (Nasdaq: AAPL ) , posing a significant threat to future revenue.
Rotting core: Some see Netflix's core market of DVD delivery waning as the discs eventually become obsolete. Netflix isn't charging customers anything extra for the digital movie streaming service, yet is burdened with the costs of developing and running it. Digital cable companies like Comcast (Nasdaq: CMCSA ) or Verizon's (NYSE: VZ ) FiOS could potentially steal customers with more developed and integrated video-on-demand services.
Slowing subscriber growth: Even though financials continue to look good, Netflix finished off its third quarter with 8.672 million total subscribers, short of its target range. It also twice lowered its full-year 2008 subscriber target, which is the lifeblood of the company. And with no more used DVDs for sale come the end of the month, some believe customers might wander over to a competitor to purchase bargain movies.
Of course, Netflix has survived and thrived despite dozens of obstacles. But the question about whether the company will continue to do so is why CAPS is such a great resource to augment your own analysis.
To see what the very best CAPS members are saying now about Netflix, just click on over to Motley Fool CAPS and have a look. It's all free, and adding your own opinions will make the community better.