The Sell-Side Responds To Netflix's Q1 Earnings

Netflix, Inc.NFLXtrading lower

Here is a summary of what some of Wall Street's most notable analysts were saying after the print.

Deutsche Bank: Maintain At Hold

Bryan Kraft of Deutsche Bank maintains a Hold rating on Netflix's stock with an unchanged $125 price target.

Cantor Fitzgerald: Substantial Long-Term Opportunity

UBS: 2017 Remains On Track

Doug Mitchelson of UBS maintains a Buy rating with an unchanged $175 price target.

Citi: Content Is Resonating Well

Mark May of Citi maintains a Neutral rating and $145 price target.

Elsewhere On The Street

Analysts at Piper Jaffray maintains an Overweight rating and $166 price target. Analysts at Loop Capital Markets maintains a Buy rating with a price target raised from $162 to $172. Analysts at Rosenblatt Securities maintains a Neutral rating with a $155 price target. Related Links: 7 Biggest Price Target Changes For Tuesday Netflix Under Selling Pressure After Q1 Report

Kraft highlighted Netflix's "light" subscriber results in the first quarter along with the "many years of negative free cash flow to support growth" bear thesis. On the other hand, the analyst noted the company's "seemingly conservative" second-quarter subscriber guidance.

Kraft also pointed out that Netflix's stock soared from the low $100s to the mid-$140 level after two quarters of "significantly" better subscriber metrics but this quarter was different. In fact, Monday's report gives "something for both bulls and bears alike."

The analyst added that beyond the near term, the stock will trade on subscribers and revenue data but this will end when net additions slow down and the focus will shift toward profit metrics.

Finally, Kraft suggested the stock's valuations does not reflect the opex and investment figures required for Netflix to achieve its growth objectives. As such, the analyst views the stock's risk to reward profile to be "unattractive."

Kip Paulson of Cantor Fitzgerald maintains an Overweight rating with a price target raised from $160 to $165.

Paulson stated that his incremental positive view of Netflix stems from its better-than-expected second-quarter subscriber guidance which only partially offsets the first-quarter subscriber miss.

Paulson argued that quarterly net adds can be volatile but its record fourth-quarter net adds coupled with the second quarter guide demonstrates a "healthy" subscriber trend over a longer-term period.

Moreover, the analyst's bullish stance is based on four other key points:

1. Long-term growth in international markets.
2. Strong secular tailwind as consumers continue shifting away from traditional TV toward streaming providers.
3. Netflix's leadership status in content spend.
4. A clearer path toward higher operating and EBITDA margins.

According to Mitchelson, Netflix's earnings report gives a clearer picture of Netflix's 2017 story. Specifically, the analyst believes the company will see another year of strong growth, especially in the international market, which does face difficult comps.

The analyst added that the results also suggest that there "must be real traction" across Europe and Asia while the older markets are "sustaining." As such, investors should be confident in the company's ability to show a sustained international growth.

According to May, Netflix's first-quarter subscriber results came in below his expectations but the second-quarter guide came in above expectations. This could be attributed to the timing of new content releases.

Nevertheless, the analyst suggested that Netflix's 8-percent year-over-year growth in domestic subscribers and 39 percent in international subscribers is evidence that the company's content is resonating with subscribers.

However, the analyst's full-year revenue outlook remains consistent, which justifies a Neutral rating on the stock.