Netflix (NASDAQ: NFLX) made waves last week when it reported a strong recovery in subscriptions. After subscriber count fell in both the first and second quarters, it came back strong in the third quarter, topping the 2021 fourth quarter number to reach 223 million. Even better, management is forecasting nearly 227.6 million in Q4, or a 4.5 million sequential increase.

The company is going through a transition right now as it faces increased competition and changes in the streaming industry. Investors are hyper-focused on Netflix's new ad-supported tier, which debuts in November, and they applauded the subscription rise.

But I wouldn't buy Netflix stock even with these developments until it deals with what I see as a critical impediment to its progress.

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Source Fool.com