Wedbush Expects Solid Q1 Beat From Netflix

In a report published Friday, Wedbush analyst Michael Pachter reiterated an Underperform rating and $215.00 price target on Netflix NFLX. In the report, Wedbush noted, “Expecting a Q2 beat as the popularity of original content should offset seasonality. Our current estimates are for revenue of $1.34 billion and EPS of $1.13, versus consensus of $1.34 billion and $1.15, and guidance of $1.12 (Netflix did not provide revenue guidance). We modeled Q2 domestic streaming sub net adds of 0.52 million, in line with guidance, but down from 0.63 million in Q2:13, reflecting the negative impact of seasonality. "We believe the positive buzz around the second season of its ‘most watched show' Orange Is the New Black drove a Q2:14 net adds number at least in line with the prior year. When combined with the recent price increase for new members and cost discipline ahead of international expansion in Q4:14, a Q2:14 beat appears likely. For international, we modeled Q2 sub net adds of 1.00 million, vs. guidance of 0.94 million and 0.61 million last year.” Netflix closed on Thursday at $439.36.