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Netflix Succeeds With Willingness To Disrupt Its Own Model, Barclays Says

Netflix Succeeds With Willingness To Disrupt Its Own Model, Barclays Says

Some Netflix, Inc. (NASDAQ: NFLX) bears point out that the streaming video platform's competitive edge can't be sustained indefinitely — but this thinking may be wrong, according to Wall Street's newest bull analyst.

The Analyst

Barclays' Kannan Venkateshwar initiated coverage of Netflix's stock with an Overweight rating and $245 price target.

The Thesis

One of the most "impressive" aspects of Netflix's history is the company's ability to recognize the competitive landscape and adapt accordingly, Venkateshwar said in the initiation note. (See the analyst's track record here.) 

"Netflix's success over the last 15 years has been because of its willingness to actively disrupt its own successful business model at different phases of its life cycle," Venkateshwar said. 

For example, Netflix had been working and planning for nearly a decade on launching a hardware device for consumers to download content with, but within weeks of the planned launch, CEO Reed Hastings scrapped the idea, the analyst said. The executive had a "hunch" that a hardware strategy would limit its ability to distribute content through competing interfaces, like Apple TV, according to Barclays. 

"Given the management team's demonstrated success so far in predicting future consumption trends and continued strategic flexibility, we believe the company is well-positioned to take on competitive challenges," the analyst said. "In our opinion, what works in Netflix's favor is clarity of vision, which in our opinion is lacking in most of the companies trying to take on Netflix at present, including companies like Apple."

Price Action

Shares of Netflix were trading higher by 1.23 percent Friday morning at $219.86, above the stock's all-time high of $217.75.

Related Links:

Netflix Binge: BofA Says Streaming Service's Momentum Backed By Subscriber Growth, Original Content

New Year's Benzinga Bulls & Bears: Apple, Disney, Netflix And More

Photo courtesy of Netflix. 

Latest Ratings for NFLX

Aug 2019MaintainsOutperform
Jul 2019MaintainsBuy
Jul 2019ReiteratesOutperform

View More Analyst Ratings for NFLX
View the Latest Analyst Ratings

Posted-In: Barclays Kannan Venkateshwar Reed Hastings streaming videoAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga


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