Netflix, Inc. (NASDAQ:NFLX) shares are cruising high today, trading at around $428, and Topeka Capital Markets analysts have raised their price target to $517, up from their previous target of $421. Topeka analyst David W. Miller said in a report dated June 6, 2014 that the Disney Pay1 deal will drive subscriber growth beyond what was previously expected in 2016.
Miller said he raised the price target “after performing additional analysis on the 2016 and 2017 portions of our master DCF matrix, specifically as it applies to revenue growth and margin expansion.”
Best performer on S&P 500
The online content streaming company was the best performer on the S&P 500 index for May, surging by as much as 30%. The stock is hovering at around $428, compared to $322 per share on April 30. Overall, the S&P 500 index is up less than 2% for the month.
Netflix, Inc. (NASDAQ:NFLX) General Counsel David A Hyman dumped 3,099 shares of Netflix in a transaction dated Friday, May 23. Hayman sold shares worth about $1.2 million and still owns 5,230 shares of the company, valued at approximately $2.1 million, according to an SEC filing. CEO Reed Hastings also sold off 15,238 shares in an open market transaction dated Tuesday, May 27. The shares were sold at an average price of $401.52, for a total transaction value of more than $6.1 million, according to a filing with SEC.
Recently Netflix, Inc. (NASDAQ:NFLX) raised its subscription price by $1. Even after the fee increase, the company did not see a repeat of the exodus it had the last time it raised its price. At that time, 800,000 subscribers left the platform because the price rose 60%. This time, users were already aware of the increase, and it was much smaller.
Netflix expansion plans in Europe
Netflix, Inc. (NASDAQ:NFLX) is planning to grow in European countries after becoming successful in the United States. Countries where Netflix could debut are Germany, Austria, Switzerland and Belgium. At present, Netflix boasts 48 million subscribers in more than 40 countries.
While trying to gain traction in European countries, Netflix, Inc. (NASDAQ:NFLX) surely will face headwinds from new competitors as well as the already-established ones. Other brands have grabbed a major chunk of the market in places where Netflix, Inc. (NASDAQ:NFLX) still doesn’t reach. For instance, the service will get a tough fight from Canal Play and Amazon.com, Inc. (NASDAQ:AMZN)’s Prime Instant Video in Germany. Apart from competition, Netflix will also have to comply with harsher rules in these countries. In France, Netflix and other streaming companies cannot show a movie until three years after its first appearance in theaters.