Wall Street is raving about Netflix.
The company reported first quarter earnings on Wednesday, and it beat expectations for earnings, matched revenues, and surged past forecasts for new subscribers.
The stock rallied by more than 12% before the market open.
Analysts at FBR & Co. hiked their price target to $US900, reflecting nearly 70% upside from where it was priced pre-market.
But FBR isn’t the only firm excited about Netflix.
Here’s a quick roundup of what some others on Wall Street are saying:
Credit Suisse raised their price target to $US505 from $US461 and maintained their “Neutral” rating on the stock. Netflix is adding new subscribers incredibly quickly — faster than even they are forecasting:
“We expect investors to look past the below-expectations profit guide for 2Q15 given the greater strategic imperative in global expansion management first articulated on the last earnings call.”
Goldman Sachs analysts are bullish on growth outside the US. Netflix added 2.6 million international subscribers, more than the 2.3 million analysts had predicted.
“We continue to believe Netflix can replicate its model globally, drive significant scale benefits, and grow margins.”
And people in markets where Netflix hasn’t launched already love their original series:
“The company commented its Australia and New Zealand launch in late March benefitted from already high consumer awareness, an existing fan base for the company’s most popular original series, and operator relationships with Optus and iiNet, two of the largest broadband providers.”
Analysts at Jefferies note that Netflix’s global expansion will be costly, although they’re not in doubt as to whether it will eventually happen.
“Sub levels surprised to the upside, but FX negatively impacted EPS. The global expansion continues; International losses will increase sequentially throughout ’15 as NFLX invests heavily in content & marketing to support the 2H Asia launch. We are lowering our ’15 and ’16 EPS ests on expansion pressure, but we are raising estimates in ’17 and beyond on strong Int’l sub growth and pricing leverage.”
JPMorgan is “Overweight” Netflix, and its analysts say the company is turning the TV industry upside down.
“We believe Netflix is on track toward significantly disrupting the linear TV market through strong subscriber growth, content differentiation, and a better consumer proposition. We think the company is benefiting from key secular trends, including the proliferation of Internet-connected devices and increasing consumer preference for on-demand video consumption over the Internet rather than linear TV.”
RBC Capital Markets also bumped up its price target, to $US600 from $US550 with an “Outperform” rating.
“We believe that Netflix has achieved a level of sustainable scale, growth, and profitability that isn’t currently reflected in its stock price …We also view Netflix as one of the best derivatives off the strong growth in online video viewing and in Internet- connected devices (tablets, smartphones, Internet TVs), with our proprietary survey data tracking significantly improved customer satisfaction levels.”
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