Market Overview

Goldman Sachs Raises Netflix Price Target Ahead Of Q1 Print

Goldman Sachs Raises Netflix Price Target Ahead Of Q1 Print

Netflix, Inc. (NASDAQ: NFLX) is scheduled to report first-quarter results April 16 after the close. The print is likely to come in ahead of consensus estimates due to a strong content slate, new distribution partners and returns from marketing investments, according to Goldman Sachs.

The Analyst

Goldman Sachs' Heath Terry maintains a Buy rating on Netflix's stock with a price target lifted from $315 to $360.

The Thesis

Terry is modeling for the following metrics in Netflix's Q1 report. (See the analyst's track record here.) 

  • 1.7 million net subscriber additions in the U.S. market and 5.6 million international net subscribers versus Netflix's guidance of 1.45 million and 4.9 million, respectively.
  • Average revenue per user growth of 10.5 percent domestically and 20.5 percent internationally.
  • Revenue of $3.7 billion.
  • Incremental marketing spend that will result in marketing deleverage of 320 basis points versus last year.
  • Net income of $284.1 million.
  • Earnings per share of 63 cents.

Beyond Q1, Terry said he expects the following from Netflix: 

  • Cash burn that grows from $2 billion in 2017 to $3 billion for the full year 2018.
  • 6 million net adds in the second quarter versus the consensus estimate of 5.2 million net adds.
  • Longer-term subscriber growth and profit that exceeds consensus estimates.

Price Action

Shares of Netflix were trading higher by 3.75 percent at the time of publication Wednesday morning.

Related Links:

Blockbuster Q4 Shows Netflix Still Wears The Crown

Here's Why Netflix Is Still In The 'Early Stages'

Latest Ratings for NFLX

Jan 2020MaintainsBuy
Dec 2019MaintainsBuy
Dec 2019DowngradesHoldUnderperform

View More Analyst Ratings for NFLX
View the Latest Analyst Ratings

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