Pretty Chill: Netflix Stock Hits All-Time High As Subscribers Hit Multi-Year High

Streaming video giant Netflix Inc NFLX is expected to report second-quarter results "well above" guidance amid record app downloads, according to Goldman Sachs.

The Netflix Analyst: Heath Terry maintains a Buy (Conviction List) rating on Netflix's stock with a price target lifted from $540 to $670.

The Netflix Thesis: Netflix is scheduled to report second-quarter results on July 16 and management is expected to show at least 12.5 million net subscriber additions, Terry wrote in a note. If churn levels remain similar to what was seen in the first quarter, the company has upside potential to report as many as 15.5 million net subscriber additions.

Expectations for a large beat on the subscriber addition front is based on part on third-party research. Specifically, data from Sensor Tower shows Netflix's total app downloads reached its highest level since the first quarter of 2016.

Terry said Netflix benefited from strong content, a lack of competition, lower churn, and people generally spending more time at home. This in part helps dispel the thesis that anyone who hasn't yet subscribed to Netflix never will.

The COVID-19 pandemic is accelerating consumer demand away from theaters, linear TV and live events towards streaming service. In Netflix's case, the company's ad-free content library and growing distribution ecosystem "serve to steepen" Netflix's growth profile over the immediate and long-term, the analyst wrote.

NFLX Price Action: Netflix traded around $526 per share at the time of publication, a new all-time high.

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