Why Analysts Are Bullish on Netflix ahead of Its Q4 Earnings


Jan. 16 2019, Updated 7:32 a.m. ET

Analysts are bullish on NFLX

Recently, Netflix (NFLX) received rating upgrades from research houses UBS (UBS) and Raymond James, indicating that analysts are bullish on its stock. Of the 43 analysts covering the stock, 12 have rated it as a “strong buy,” while 17 have rated it as a “buy.” Thirteen analysts are “neutral” on the stock, one has rated it as a “sell,” and two have rated it as a “strong sell,” respectively.

Reuters analysts have set a mean consensus price target of $380.22 and a median price target of $400.00 on the stock. Netflix closed at $332.94 on January 14, ~20.2% lower than its mean target price.

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Why are analysts bullish on the stock?

Analysts are bullish on Netflix stock because of the company’s strong subscriber growth. Netflix’s number of subscribers increased 25% year-over-year in the third quarter of 2018. The company’s strong subscriber growth has been fueled by its emphasis on original content—including movies and local-language content—in international markets, where it’s proved to be extremely popular.

As a result, analysts seem to be confident that the stock will weather the competition in both domestic and international markets.

Peer comparison

Among Netflix’s peers (QQQ), Amazon (AMZN), which is scheduled to report its fourth-quarter earnings results on February 7, has “buy” ratings from 46 out of 49 analysts. Comcast (CMCSA), which is scheduled to report its fourth-quarter earnings results on January 23, has received “buy” ratings from 25 out of 33 analysts. Charter Communications (CHTR), which is set to release its fourth-quarter earnings results on January 31, has “buy” ratings from 21 out of the 28 analysts covering its stock.


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