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Netflix ( NFLX ) stock has been beaten down by concerns of rising costs and competition, but 2016 will be the year the streaming video service proves its global business model, Pacific Crest Securities analyst Andy Hargreaves said in a report Tuesday. “Netflix’s seamless global distribution is a structural competitive advantage that is likely to provide efficiency advantages that compound over time,” Hargreaves said. “This should drive share gains and profit growth in excess of current expectations.” He rates Netflix stock as overweight with a price target of 140. Netflix’s all-time high is 133.27, reached on Dec. 7. Netflix was down more than 1% to near 88 in morning trading on the stock market today . Hargreaves expects Netflix to add 21.5 million global subscribers in 2016, up from 17.4 million a year ago and ahead of consensus expectations for 19.1 million. Netflix ended 2015 with 74.76 million streaming subscribers worldwide. Netflix could hit 195 million subscribers worldwide by 2024, he said. “2016 should show the advantages of Netflix’s global business model,” Hargreaves said. “Netflix’s business model is based on centralized costs with limited variable cost per geography. . . . Global distribution provides a data feedback loop that should allow Netflix to invest in content, marketing and product development more efficiently than key competitors.” Hargreaves estimates that Netflix will add 20.5 million new subscribers in 2017, vs. consensus expectations for 19 million. Netflix competes with Amazon.com ( AMZN ) and Hulu, among others. RELATED: Netflix Stock Downgraded As Risks And Spending Increase Scalper1 News
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