Netflix, Inc. (NASDAQ:NFLX) appears poised to beat expectations for its third quarter. Nonetheless, Wedbush analysts remain uneasy about the company and have maintained their Underperform rating on the stock. They also “grudgingly” raised their price target for the stock from $80 to $140 per share.

Netflix

Netflix reports results Monday

Michael Pachter, Nick McKay and Nick Citrin issued a preview report on the streaming video provider, which is due to release third quarter results on Oct. 21. They’re expecting the company to beat expectations and are looking for $1.1 billion in revenue and earnings of 55 cents per share. That’s compared to consensus of $1.1 billion in revenue and 49 cents per share and Netflix, Inc. (NASDAQ:NFLX)’s own guidance of between 30 cents and 56 cents per share.

They believe the company will report third quarter domestic streaming net subscriber adds which are more than the midpoint of its guidance of between .69 million and 1.49 million. They are estimating the company will have 1 million net new subscribers during the quarter because of a better than expected positive response to Netflix’s original series Orange is the New Black. The Wedbush analysts said in spite of Netflix, Inc. (NASDAQ:NFLX)’s higher marketing spending toward the end of the third quarter, cost control should make it possible for the company’s earnings per share to be over the high end of its guidance.

Netflix’s fourth quarter might not be as good

The analysts predict that Netflix, Inc. (NASDAQ:NFLX)’s management will provide fourth quarter guidance for up to 2.05 million streaming net subscriber adds. That’s the amount the company added during the fourth quarter of last year.

In spite of positive seasonality during the fourth quarter, they believe the company will struggle to hit 2.05 million new subscribers. They call Netflix, Inc. (NASDAQ:NFLX)’s current original offerings “somewhat lackluster.” They believe it will be even harder for the company to deliver a number of new subscribers in the first quarter of 2014 that’s even close to the number it delivered in the first quarter of this year because of saturation in the domestic market.

Netflix customers remain price sensitive

Wedbush did a survey of more than 1,000 current domestic streaming subscribers of Netflix. They found that in general, subscribers remain somewhat price-sensitive, with 79 percent opposing any increase in price. They suggest that the bullish case for Netflix, Inc. (NASDAQ:NFLX) is centered on the company having “significant pricing leverage,” but they believe that any increase in price is going to slow the company’s growth down “to a crawl” even though it will drive profits higher. In their view, the company can’t maintain high growth and high profits at the same time.