Netflix Inc. stock is up over 8.5% and reached $122.32 on Tuesday, after Guggenheim analysts initiated coverage on the company’s stock with a rating of Buy and $160 stock price target. Guggenheim analysts believe the streaming giant network has substantial upside potential in the future quarters. The sell side firm believes that paid subscribers base across the world to increase at 35% of compound annual growth rate by the end of 2020.
Michael Morris, an analyst at Guggenheim believes the streaming companies global margin to cross 26% margin by fiscal year 2020. Moreover, Mr. Morris believes Netflix foreign results to be enhanced by the latest broadband improvement, together with mobile proliferation. Furthermore, the analyst is supporting Netflix to increase its paid subscribers at an annual compound growth rate of 12% by fiscal year 2020.
The company reported its second quarter financial results for fiscal year 2015 on July 15. Netflix posted weaker than expected performance in the recent quarter, reporting non-GAAP earnings of $0.035 per share less than analysts’ estimate of $0.087. The company’s revenue came in at $1.64 billion, similar to the consensus estimate.
According to the Guggenheim research firm, Netflix Inc. can substantially increase its growth in the upcoming quarters via its extended original content. Moreover, the firm believes that the streaming company’s recommendation can provide support in distinguishing its content offering from the rivals. Mr. Morris expects that the stock of the company is overpriced at the moment as it’s in early stage of its investment. In the last 12 months Netflix stock has gained more than 98%.
The company’s stock has witnessed an overall 23 insider trades in the last 90 days. These insider trades include twenty one short and only two long trades. Moreover, over the last twelve months, it was traded forty seven times by the insiders. In almost 41 of these transactions, the insider was seller while the buyer was the company employee in 6 instances.
Jay Hoag, who is amongst one of the directors at the company, sold approximately 11,000 shares, on 23rd July from his own account, the transaction worth $1.2 million.
The latest insider activity was posted on July 30 from the Chief Content Officer, Theodore A Sarandos account. He sold over 200,000 shares in 2 transactions. His $106 strike price was lower than his transaction price Hoag. The transactions totaled to over $22 million.
Netflix stock was up 7.63% to $121.15 at market close on Tuesday August 3.