Analysts Weigh In On Netflix, Inc. Following 1Q:15 Results

Netflix, Inc. (NASDAQ:NFLX) shares were on the rise Thursday after releasing first-quarter results which were stronger than expected. In reaction, analysts from Canaccord Genuity, and Cantor Fitzgerald took a positive stance on the stock, while an analyst from Wedbush took a different route with a more negative perspective. Netflix shares are currently trading at $553.13, up $77.67 or 16.34%.

Canaccord Genuity analyst Gregory Miller reiterated a Buy rating on NFLX, and raised the price target to $565 (from $530). The analyst reasoned the new price target saying, “We believe this stock will continue to be a significant outperformer, as it will become increasingly clear that the company’s lead in being the first to market with commercialfree on-demand video streaming service is only growing stronger. With such strong market share gains in the quarter, we are again increasing our DCF-driven price target.”

Cantor Fitzgerald analyst Youssef Squali also weighed in today on the stock, stating, “Netflix reported very strong 1Q:15 results, with the all-important subscriber metrics again exceeding expectations for both domestic and international segments. Streaming sub guidance for 2Q:15 is 25% ahead of consensus, driven by international growth. With 60M+ streaming subs, a superior value proposition and a gradual but persistent shift to OTT, we remain constructive on NFLX.” Squali reiterated a Buy rating on the stock and raised the price target to $580 (from $500).

Wedbush analyst Michael Pachter had a more doubtful perspective on the stock, reiterating an Underperform rating, but also raising the price target to $270 (from $245).

Pachter noted, “While we acknowledge that Netflix’s subscriber growth is impressive, we remain skeptical that it can deliver the leverage many investors expect. Content costs are on the rise, as evidenced by the $626 million increase in streaming content liabilities in Q1. The company has added over $2.6 billion to its streaming content library over the last two quarters, while amortizing only $1.5 billion of this amount, meaning that it has deferred recognition of over $1 billion in streaming content spending in the last two quarters alone.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Pachter has a total average return of 1.4% and a 47.4% success rate. Pachter has a -38.4% average return when recommending NFLX, and is ranked #1702 out of 3572 analysts.


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