Market Overview

Netflix Download Data Suggests 'Top And Bottom Line Outperformance' Due To Social Distancing

Netflix Download Data Suggests 'Top And Bottom Line Outperformance' Due To Social Distancing

Unlike many other stocks, Netflix Inc (NASDAQ: NFLX) has a business model that is relatively insulated from the impact of the COVID-19 outbreak.

On Thursday, another analyst said Netflix’s numbers may actually be benefiting from the rising number of Americans working from home.

The Netflix Analyst

BofA Securities analyst Nat Schindler reiterated his Buy rating and $426 price target for Netflix.

The Netflix Thesis

Schindler said Netflix subscriber growth should beat expectations to the upside in the first half of 2020. At the same time, the company’s margins should get at least a temporary boost due to reductions in costs related to reduced marketing spend and the shutdown of TV and movie production.

App download data suggests 7% growth in app downloads so far in the first quarter. Schindler anticipates a rise in Netflix engagement due to social distancing will translate to subscriber additions and retention. However, he said a U.S. recession will reduce the opportunity for price increases in the near-term.

Benzinga is covering every angle of how the coronavirus affects the financial world. For daily updates, sign up for our coronavirus newsletter.

Schindler said investors should expect Netflix to beat top-line and botton-line expectations in the first quarter as stay-at-home orders around the world have accelerated Netflix’s adoption and engagement.

“We expect this could support long-term penetration and growth rates, though elect to leave estimates unchanged amid uncertainty around the virus outbreak’s economic impact and duration,” Schindler wrote in a note.

Benzinga’s Take

BofA Securities data suggests social distancing is boosting Netflix’s subscriber growth for now. However, investors should monitor the situation to see if the economic downturn increases subscriber churn as the outbreak drags on.

Related Links:

Roku Vs. Netflix: Needham's Laura Martin Sees A Clear Quarantine Winner

4 'Stay-At-Home' Stocks That Are Soaring Thanks To Social Distancing

Latest Ratings for NFLX

May 2020CitigroupMaintainsNeutral
May 2020JefferiesInitiates Coverage OnBuy
Apr 2020SunTrust Robinson HumphreyMaintainsBuy

View More Analyst Ratings for NFLX
View the Latest Analyst Ratings


Related Articles (NFLX)

View Comments and Join the Discussion!

Posted-In: Bank of America Coronavirus Nat SchindlerAnalyst Color Price Target Reiteration Analyst Ratings Tech Best of Benzinga

Latest Ratings

MGNXSVB LeerinkMaintains27.0
RCUSSVB LeerinkReiterates42.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at