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Netflix 1Q14 Earnings Report, Analyst Opinion Divided

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Shares of Netflix (NASDAQ: NFLX) are trading up ~6.5 percent today following the company's [1Q14 earnings report released Monday.]

Despite this rise in share price, analysts seem to be divided in opinion on Netflix's outlook. The majority of analysts have taken either a neutral or bullish stance with only a few bearish.

The common view among bulls is that the international market provides significant potential for long-term growth in subscriptions, in fact, a Raymond James analyst wrote, "While domestic is ~3x the size of international today, Netflix expects international to be larger longer-term. We believe Netflix can reach ~ 55 million long-term domestic subscriptions and 60 million plus international subscriptions."

In addition to international subscription growth, bulls look to the $1-2 price increase that may be enacted as soon as 2Q14 as a catalyst to dramatically grow revenue and profit estimates.

Bears, in contrast, view this price increase as possibly having a negative affect. As Wedbush analyst Michael Pachter wrote, "We believe that even modest price increases have the potential to slow subscriber growth and to attract competition." Moreover, bears make the argument that, although the international market does present an opportunity for subscription growth, the current share price "adequately" represents this possibility.

The following list contains a number of firms with their respective ratings and price target.

  • Raymond James - Outperform, $450
  • Cantor Fitzgerald - Buy, $425
  • BMO Capital Markets - Market Perform, $400
  • Credit Suisse - Neutral, $369
  • Pacific Crest - Outperform, $520
  • FBR & Co. - Marketperform, $393
  • Jefferies - Underperform, $300
  • Wedbush - Underperform, $215
  • JP Morgan - Overweight, $500

Posted-In: BMO Capital Markets Cantor Fitzgerald Credit Suisse FBR JefferiesAnalyst Color Earnings News


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