The Wall Street analysts are all behind Netflix, in spite of the company’s growth being weaker than expected growth of subscribers in the second quarter.
Most of the analysts see the online streaming company’s drop in subscribers as pain in the growth, which is on expected lines as it works upon to expand their reach and then strike the right balance of what they spend on content and marketing.
The analysts at KeyBank Capital Markets, led by Andy Hargreaves said through a note on Monday after Netflix had announced their earnings results, which their long-term view of the company’s growth potential remains unaltered. Though KeyBank had lowered their target price from $385 to $375, primarily based on a decline seen to their near-term estimates, still they would keep on recommending to investors that they should own Netflix.
The shares of Netflix had gone down 12.6% in premarket trade on Tuesday morning after the company had announced that it had added 5.15 million streaming users in the second quarter, which is a decline of 17% from the estimate of 6.2 million that the company had provided in April. There has been an addition of 4.47 million subscribers internationally and 670000 subscribers on the domestic front, which also happens to miss their estimates made in April, that of 5.9 million international subscribers along with 1.2 million domestic subscribers.
Still, despite this downward trend, a number of investment firms look at the misses and the pullback as a result of all these, as an opportunity to buy. Analysts at Stifle, led primarily by Scott Davit have seen an upgrade in their rating of Netflix on Tuesday, from hold to buy. This is due to the fact that they believe the shares are once again at an attractive position right now.
The long-term outlook for Netflix is being seen on a positive front as the feeling is that upside exists for the domestic as well as international opportunities for the company.
Analysts of Piper Jaffrey also feel that the long-term potential is great to suggest a buy for the stock.
