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Notable Netflix Analyst Says Stock Could See Another 67% Gain

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Notable Netflix Analyst Says Stock Could See Another 67% Gain

Shares of Netflix, Inc. (NASDAQ: NFLX) have already gained 30 percent in 2017 alone, and the stock is higher by more than 75 percent over the past year. Naturally, this begs the question of whether Netflix's stock has peeked. According to Rob Sanderson of MKM Partners, the answer is a simple: not even close.

Speaking as a guest on CNBC's "Trading Nation" Thursday, Sanderson explained why he raised his price target on Netflix's stock from $158 to $195. The analyst explained that despite an increase to his price target, his bullish stance on the streaming video platform hasn't changed at all.

Sanderson continued that his price target is based on Netflix's 2021 metrics, which represent the fifth year of operating as a global entity. At that time, he is modeling the company to earn $12.12 per share, which represents a notable growth from just $0.50 per share the company earned last year.

But at the end of the day, Netflix, like every other stock in the universe, carries some risk. Sanderson acknowledged that one of biggest risk facing the company is if it can scale up the subscriber base to cover its multibillion-dollar investments in content.

Nevertheless, the analyst sees "more than ample opportunity" for Netflix to continue scaling its business internationally for years to come.

Don't Bet Against Netflix

Dennis Davitt of Harvest Volatility Management was also a guest on the "Trading Nation" segment; he cautioned against betting against Netflix.

"I've seen a lot of really good investors lose a great amount of money on stocks like Netflix, and that usually comes from when they short them," Davitt said.

Davitt may have suggested that short sellers have reason to like the stock, namely its strong out-performance this year and a P/E of 150. But this may not make a difference, as Netflix is a "momentum stock" and not wise to bet against.

Davitt recommends investors buy put options on Netflix's stock, which offers downside protection that can be bought for around 5 percent of the equity investment.

Related Links:

Netflix Season 2 Episode 1: Expectations For International May Be Way Too Conservative

Netflix Makes New All-Time High After Price Target Raise

Latest Ratings for NFLX

DateFirmActionFromTo
Oct 2019MaintainsOutperform
Oct 2019MaintainsOutperform
Oct 2019DowngradesOverweightUnderweight

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