Netflix, Inc. (NASDAQ:NFLX) has received a big upgrade from analysts at Morgan Stanley, who just downgraded the company three weeks ago. The firm now rates Netflix as Equal-Weight.
Netflix upgraded from Underweight
Analyst Scott Devitt actually admitted being wrong when he downgraded Netflix, Inc. (NASDAQ:NFLX) a few weeks ago. He had said at that time that the company would start seeing its subscriber growth in the U.S. begin to slow for a while before international users would be able to offset that deceleration. However, Netflix’s latest earnings beat proved him wrong.
He said the European nations of Germany, Spain, Italy and France could offer Netflix, Inc. (NASDAQ:NFLX) an opportunity that’s almost the size of the U.S. In addition, he notes that as Internet connection speeds increase in Latin America, Netflix could see strong growth there as well.
The Street rates Netflix as a Buy
The Street Ratings Team has a B- score and a Buy rating on Netflix, Inc. (NASDAQ:NFLX) They see several strengths in the company, which they say should impact it more than any of the weaknesses it has. They point to revenue growth which remains robust, a solid performance in its stock, an “impressive” earnings per share growth record, “compelling” net income growth and “good” operational cash flow.
The analysts from The Street note that Netflix, Inc. (NASDAQ:NFLX)’s revenue growth was significantly higher than the industry average, which was 7.4%. Netflix recorded growth of 24.3%. In addition, the company recorded 507.69% growth in earnings, which helped propel its shares upward by 162.88% over the last year or so. That means Netflix has outperformed the S&P 500 Index over that same time frame.
Netflix, Inc. (NASDAQ:NFLX) also recorded major earnings per share improvement in the most recent quarter, showing a pattern of positive growth in earnings over the last year. The Street analysts believe the trend will continue, as will the upward trend of the company’s stock.