Rosenblatt Raises Netflix Target To $200 After Quarter That Was 'Just Too Good'
Analysts at Rosenblatt Securities turned incrementally bullish on Netflix, Inc. (NASDAQ: NFLX) after the company reported its second-quarter earnings, which was "just too good." The firm's Alan Gould upgraded the stock from Neutral to Buy with a price target boosted from $155 to $200.
Netflix said it added 5.2 million subscribers during the quarter, which beat the analyst's estimates by two million subscribers and management's third-quarter guide is also 0.5 million users above the Street's estimate. The strong subscriber beat isn't an outlier as the company has now beat estimates in 12 out of the past 15 quarters, the analyst noted.
Meanwhile, the streaming video company's guidance also calls for a small profit in its international division -- an event that was ultimately expected but the company's prior guidance only implied its international loss would narrow this year, Gould added.
Netflix's streaming library assets per paid subscriber, a key metric used by the analyst to measure how much investment in films and TV shows is required to attract and retain subscribers, leveled off during the quarter.
Bottom line, Netflix continues to build a "content moat" and amortize the cost across its global consumer audience. It can do so as the company boasts the largest global subscriber base, which makes it the lowest cost provider on a per subscriber basis and acts as producer, distributor, and retailer which maximizes overall profit.
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Latest Ratings for NFLX
| Jul 2017 | Credit Suisse | Maintains | Neutral | |
| Jul 2017 | Rosenblatt | Upgrades | Neutral | Buy |
| Jul 2017 | Nomura | Maintains | Buy |
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