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Investors concerned with Netflix, Inc. (NASDAQ:NFLX) CFO David Wells' retirement may want to reconsider, according to KeyBanc Capital Markets.
The Analyst
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KeyBanc's Andy Hargreaves maintained an Overweight rating on Netflix with an unchanged $375 price target.
The Thesis
Wells has done "exceptionally well financially" during his 14-year tenure at Netflix, the last eight of which were in the CFO seat, Hargreaves said in a research report. (See the analyst's track record here.)
Prior to leaving the company, the executive ensured the streaming video company's financial strategy is well-established, the analyst said. While his departure will certainly be a loss for the company, there will be "minimal disruption," Hargreaves said.
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Netflix's global presence and growth outlook implies it will be able to attract excellent candidates, but the ideal candidate would be someone with strong views on the relationship between content and marketing spend and subscriber growth, the analyst said.
This is the "most critical financial challenge" the company faces, and the ideal CFO should also have experience at a subscription business, or at the very least strong opinions on how to operate a streaming business, in Hargreaves' view.
The incoming CFO will likely oversee a new round of debt raise in the second quarter of 2019, which is far enough down the road for the new executive to fully get up to speed and comfortable in the new job, according to KeyBanc.
Price Action
Netflix shares were trading down slightly off the open Tuesday at $341.21.
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.