Netflix, Inc. (NFLX) An Analyst Darling Even With Rate Hike

Netflix, Inc. (NFLX) An Analyst Darling Even With Rate Hike

Netflix, Inc. (NASDAQ:NFLX), a favorite source for binge-watching television and movies, just announced that they will be raising subscription prices for new customers by $1-$2 a month in order to purchase more content for its growing subscriber base. The company is making an effort to improve its selection of TV shows and movies, in addition to its original content. Just before this announcement, Pacific Crest analyst Andy Hargreaves, was pointing out Netflix’s growth, expecting “Netflix to enter France in the second half of the year, followed by Germany, Italy, Spain and Turkey by the end of 2015. The new markets would double Netflix’s international total addressable market.” This observation, adding to Netflix’s positive trajectory, has Andy recommending BUY Netflix.

Play Quizzes 4

Andy’s recommendations have earned him the number 54 spot out of 3015 analysts due to his +7.0% average return over S&P 500 (INDEXSP:.INX) and a 59% success rate of recommendations. But, if we just take a look at Andy’s past Netflix, Inc. (NASDAQ:NFLX) recommendations, Andy has an even more impressive 71% success rate! In this week’s flashback Thursday, we take a look at Andy’s past Netflix recommendations to see how he earned such an impressive statistic.

After Netflix, Inc. (NASDAQ:NFLX) beat Q1 expectations in April 2013, Andy reiterated his BUY recommendation and raised his price target from $225 to $230. Andy’s recommendation was based on “the faster-than-expected sub growth and stronger international profit outlook.” This recommendation earned him +7.6% over S&P-500.

Fund Manager Profile: Zhang Hui Of China’s Southern Asset Management

investHistorically, the Chinese market has been relatively isolated from international investors, but much is changing there now, making China virtually impossible for the diversified investor to ignore. Earlier this year, CNBC pointed to signs that Chinese regulators may start easing up on their scrutiny of companies after months of clamping down on tech firms. That Read More

A month earlier, Andy recommended BUY Netflix, Inc. (NASDAQ:NFLX), estimating that “Netflix’s U.S. streaming video business will hit 36 million subscribers by the end of 2015 and draw 17 million subscribers overseas.” Andy went on to call Netflix “the clear global leader in subscription streaming video”. At the time, the stock had nearly doubled year-to-date, and Andy ended up earning +12.8% over S&P 500 (INDEXSP:.INX).

In September and October of 2012, Andy saw some of his highest returns when he recommended BUY Netflix, Inc. (NASDAQ:NFLX). In September, Andy earned +31.7% over S&P-500 and when he reiterated his BUY rating in October, he earned +31.5% over S&P-500. Andy was not concerned about the pace of Netflix’s spending on new content, because he knew it would slowdown saying, “As long as they manage it so it’s within the realm of subscriber growth, the business should look really good.”

And while Andy did experience a -6.4% over S&P-500 loss when he advised Netflix, Inc. (NASDAQ:NFLX) in April 2012, his previous recommendation from March 2011 earned him a solid return. Andy reiterated his BUY rating, arguing that the company’s “competitive advantages are intact”.  Andy found that several pieces of data were pointing to Netflix’s success including, “searches on Google for ‘Netflix’ have risen by 132% in Q1, on average, and have surpassed searches for ‘The Walt Disney Company (NYSE:DIS),’ ‘Comcast Corporation (NASDAQ:CMCSA),’ ‘HBO,’ ‘Warner,’ and ‘Amazon Prime’.” Andy earned +28.4% over S&P-500.

Will subscription price impact Netflix, Inc. (NASDAQ:NFLX)’s stock price? We will have to wait and see.  But, to continue following Andy’s recommendations, be sure to download TipRanks, and start making informed financial decisions with advice you can trust.


Updated on

TipRanks was founded in 2012 with the goal of giving power back to the individual investor. Our hope is that by making analyst performance data easily available and highly visible to the investing public, TipRanks will not just help save others from our investing mistakes, but will also bring back accountability, objectivity, and transparency to the business of stock picking and analyst reports. TipRanks is proudly unaffiliated with any investment firm.
Previous article Weitz Funds On Liberty Media Corporation: Clarity through Complexity
Next article Apple Inc. CEO: Microsoft Office For iPad Could Have Come Earlier

No posts to display


  1. I think this kind of non sense analysis should not mislead people. The only attraction and growth factor for Netflix was the originals and low subs price but with Amazon prime offering tens of HBO’s award wining shows all as good or better than HOC there is no this original factor for netflix anymore.The price hike removes this “bang for the bucks” factor and will significantly affect growth. Net neutrality gone Netflix will be milked by ISPs. So, there is nothing to look forward to for Netflix but international growth which has been and will be a money loser for a few years. Furthermore, HBO is very popular internationally with more than 100 million subs so the deal between Amazon and HBO will seriously impact international growth.
    I would be cautious with the stock because dropping to below $100 is becoming more and more real with Netflix dipping after a good Q is a serious warning.

Comments are closed.