Streaming service provider Netflix (NFLX) is upsetting employees after changing its incredibly generous parental leave policy. The company is scaling back its one-year paid paternal leave as more employees were taking advantage of the offer than expected. Instead, the company reportedly wants employees to limit paternal leave to six months, matching industry standards.
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This is part of Netflix’s ongoing culture shift away from its former “freedom and responsibility” mantra. Company executives argued that employees were taking advantage of the freedom part of this mantra without adhering to the responsibility bit.
What This Means for NFLX Stock
While employees may bemoan the death of the generous paternal leave policy, it’s part of Netflix’s effort to reduce operating costs and increase profits. The changes to paternal leave quietly went into effect in 2018 and NFLX shares have largely been up since then.
2024 has been an exceptionally strong year for NFLX stock with a 92.36% increase year-to-date and a 12-month gain of 95.12%. This rally has continually pushed the stock to new all-time highs this year, with the latest happening yesterday when it closed out trading at $936.56 per share.
While NFLX shares show this push toward profits is working, it does come with some risks. That includes reducing Netflix’s ability to bring in top talent with its previously bountiful paternal leave policy. Considering the company focuses on producing high-quality content for subscribers, this could come back to bite it in the long run.
Is NFLX Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Netflix is Moderate Buy based on 24 Buy, 10 Hold, and two Sell ratings over the last three months. With that comes an average price target of $835.66, a high of $1,100, and a low of $550. This represents a potential 10.77% downside for NFLX shares.
