Cantor Fitzgerald Maintains Buy Rating For Netflix; Sees More Growth Ahead

Cantor Fitzgerald maintained its Buy rating and $500 Price Target on Netflix, Inc. NFLIX and saw more growth ahead from a European launch.

Analyst Youssef Squali commented that he expects “Netflix to report solid 3Q 2014 results on October 15, with strength across both the U.S. and international markets.”

Squali felt that “we could see additional upside to international (free) subs given the six-country European launch last month. The stock is up ~26 percent YTD, dramatically outperforming both the S&P500 and our CII.”

“For the stock to work from here, we need to see further international strength, above and beyond what's already baked into current expectations, and further contribution margin improvement domestically,” according to Squali.

The firm’s 3Q 2014 revenue, EBITDA and EPS estimates were “$1,432.1M (+29.5 percent Y/Y, implying further Y/Y acceleration), $149.8M (10.5 percent margin), and $0.92, slightly above (FactSet) consensus at $1,408.9M, $146.6M, and $0.91, respectively. Management guided to 3Q EPS of $0.89.”

According to Squali, for 4Q 2014 “consensus is modeling for revenue of $1,495.3M, EBITDA of $143.7M, and $0.87 EPS,” while the report modeled “year-end domestic streaming subs of 40.1M and international subs of 17.0M.”

Netflix Inc. recently traded at $453.21, down 1.82 percent.