Analysts provide their insights on Q1 earnings from video streaming giant Netflix, Inc. (NASDAQ:NFLX) and athletic apparel brand Under Armour Inc (NYSE:UA). One analyst reassures investors of Netflix’s strength despite weak international subscriber guidance for next quarter, while the other predicts earnings success for UA due to various growth drivers.

Netflix, Inc.

Top analyst Mark Mahaney of RBC Capital weighed in on Netflix following the firm’s Q1:16 earnings release. The company posted $1.96 billion in revenues, in-line with his expectations. Netflix posted GAAP EPS of $0.06, beating his $0.03 estimates. The analyst notes strong subscriber additions as a result of Original Content launches, as well as in-line domestic streaming revenue. Other quarter wins include record high U.S. margins, a 3% y/y and 7% y/y increase in ARPU’s for domestic and international, respectively, and lower than expected international contribution loss guidance for next quarter.

While the company displayed a mostly strong quarter, Mahaney notes investor concern regarding, “notably weak” guidance for subscriber additions in Q2 of 2 million, vs consensus estimates of 3 million. However, the analyst believes this figure is a “timing issue” and not an indication of the weakness. He explains, “The Street may have mis-modeled the tough comp from last year’s Australia/NZ launch, but we view this as more of a slow but substantial ramp issue of imperfect timing.”

Despite lower than expected international subscriber guidance for next quarter, Mahaney believes the company is well-positioned in the market. He explains, “We continue to believe that Netflix’s value proposition has universal appeal – as demonstrated by its success in North America, Latin America, and Western Europe.” Mahaney predicts long-term growth for the company and notes that “Netflix Sub & Profit results show a pattern of consistent growth and margin expansion.” He states, “We still see $10+ in EPS by 2020 driven by 180MM global subs @ $11 ARPU with 30% Operating Margins. And we believe that supports a potential doubling in NFLX shares over a 3-year time frame.”

The analyst reiterates his Outperform rating for the stock wit ah $140 price target.

According to TipRanks, Mark Mahaney is ranked #7 out of 3,893 analysts on TipRanks. He has a 64% success rate with an average return of 19% per recommendation.

Mark Mahaney Stats

Out of all the analysts who have rated the company in the past 3 months, 56% gave a Buy rating, 12% gave a Sell rating, and 32% remain on the sidelines. The average 12-month price target for the stock is $120.97, marking a 12% upside from where shares last closed.

Under Armour Inc                                                     

Analyst Camilo Lyon of Canaccord provided an earnings preview for Under Armour, set to release its 1Q:16 report on Thursday, April 21. The analyst believes the company will display earnings success, marked by his predicted 27% increase in sales, and elaborates on two key growth drivers from the quarter to support his views.

Lyon highlights the massive success of the company’s basketball segment, which he predicts will “become a $250-$300 category this year (10 x larger vs a few years ago),” primarily from favorable Stephen Curry shoe sales. The analyst state that the “Curry Two experienced solid sell-through in Q1” and competed with the likes of established player Nike. This impressive growth caused the analyst to predict 60% footwear growth for the quarter. The analyst believes the release of the Curry 2.5 in May will further boost the stock. In addition to footwear, Lyon sees “new intros in running, training, and outdoor” products and international growth as contributions of the company’s “outsized growth rate (which) can persist well into next year.”

The analyst predicts gross margin to mimic guidance for the quarter of 150 bps, but believes “there is an opportunity for UA to do better” going forward due to easing inventory and shipping constraints. The analyst also factors increasing 2H orders as a primary reason the company will increase its overall 2016 guidance “in what has now become customary.” He concludes, “1Q16 should be another data point supporting our ‘once in-a-generation company’ thesis that has multiple growth levers available to it, including door/channel/category expansion.”

In light of these positive data points, Lyon reiterates his Buy rating on the company with a $65 price target.

According to TipRanks, Camilo Lyon has a 50% success rate recommending stock with an average loss of (1.4)% per recommendation. Out of all the analysts who have rated the company in the past 3 months, 67% are bullish, 7% are bearish, and 27% remain on the sidelines. The average 12-month price target for the stock is $50.12, marking a 15% upside from where shares last closed.