Heading into Netflix, Inc. (NASDAQ:NFLX) third-quarter earnings report post-close today, FBR analyst Barton Crockett reiterates a Neutral rating on the stock, with a price target of $172, which implies a downside of 15% from current levels. (To watch Crockett’s track record, click here).
The analyst sees limited upside for NLFX as the stock has shot up 26% in the last three months, versus a 4% rise in the S&P 500 and single-digit rises in “FANG” peers.
Crockett noted, “While growth has surprised positively, we believe that much is baked in and that risks lurk in high expectations and a transition to focus on EPS growth from sub growth. So, we stay Neutral.”
Rosenblatt analyst Alan Gould joined the conversation noting, “In the year ago quarter NFLX added 3.57 million subs which came in almost 1 million higher than guidance, with almost all the upside from the international operations. We are estimating 4.45 million. There was no competition from the Olympics this year and no un-grandfathering of a price increase, but the content was not exceptional this quarter with the strongest domestic titles appearing to be the third season of Narcos and the launch of Ozark vs. the original season of Stranger Things and the second season of Narcos in last year’s third quarter.”
“Contribution profit and EPS should be strong due to continued scale economies. Both consensus and we are projecting EPS of $0.32, in-line with guidance, up from $0.12 last year. A non-cash re-measurement charge on the $1.3 billion of euro bonds could impact reported EPS,” the analyst added.
As such, Gould rates NFLX shares a Buy with a price target of $225, which represents 11% upside from where the stock is currently trading. (To watch Gould’s track record, click here)
Out of the 36 analysts polled in the past 3 months, 23 rate Netflix stock a Buy, 12 rate the stock a Hold and 1 recommends a Sell. With a slight downside potential, the stock’s consensus target price stands at $202.12.