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.
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.
Historically, 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.