It’s been a bit of a roller coaster for Netflix (NFLX) backers and even though the video streaming service’s stock price has fallen around 24% from its all-time high in June, Monness analyst Brian White still rates the stock a Buy with a $430 price target. White’s target implies a nearly 29% upside potential from current levels.
The bullish analyst isn’t deterred by the big drop. He believes though shares are suffering, big projects in the works could lead the company to greater success as it surges forward on the tracks. Tomorrow will be revealing as NFLX releases its 3Q18 earnings report along with a video interview at 6 p.m.
Ahead of the print, White predicts Netflix will meet his 3Q18 estimate of $3.985 billion, marking a 34% increase from last year, below Wall Street’s consensus of $3.997 billion. White calls for an EPS of $0.66 for 3Q18, two cents behind Wall Street’s EPS prediction of $0.68.
“On a standalone basis and void of the company’s guidance, Netflix’s fundamental performance this year has been exceptional as the platform has gathered momentum around the world and compelling new content has been infused into the service. That said, the company’s overly exuberant outlook in April resulted in an embarrassing shortfall in 2Q:18 subscriber net additions and revenue also missed expectations,” White said.
White believes Netflix is lagging when it comes to delivering guidance — noting, “In our view, Netflix still does not have a good handle on accurately forecasting quarterly subscriber net additions, thus we expect volatility around this number to continue (i.e., up and down). However, we believe the combination of engaging new content, momentum in overseas markets, pricing flexibility and a proven business model that is successfully scaling on a global basis will provide for healthy growth for years to come.”
The modern-day Blockbuster Video has new plans coming up soon — including a proposal to open a new production facility in Albuquerque, New Mexico in addition to negotiating the purchase of ABQ Studios. The highly popular original series House of Cards is also premiering on the site November 2nd. NFLX Chief Financial Officer, David Wells also announced his departure mid-August. He’s still in the seat while the company chooses its successor.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Brian White has a yearly average return of 17.1% and a 64% success rate. White has a 4.7% average loss when recommending NFLX, and is ranked #88 out of 4,887 analysts.
But it’s not enough just to ask one rider what he thinks. The Street is a bit more moderate than the man behind this report, as TipRanks analytics exhibit NFLX as a Moderate Buy. Out of 38 analysts surveyed in the last three months, 26 are bullish, while 10 remain sidelined and two are bearish. With a consensus price target of $390.69, these analysts see 17% upside potential ahead. (See NFLX’s price targets and analyst ratings on TipRanks)