The analyst has given a rating of Overweight to the stock of the streaming media giant.
International expansion initiatives by Netflix, Inc. are proving to be rather ‘not so beneficial’. On a year-to-date basis the stock has plunged by 22% which have raised concerns amongst the investors regarding the investments made by the company on its international expansion venture.
The online video streaming media is constantly trying to make an effort to create a ‘seamless customer experience’ – and to do so it has not only launched its streaming services in over 190 countries but it’s becoming quite a thing in the HDR and original programming sector as well.
Furthermore, the stock has been getting quite a hit due to the rising costs and the increased competition in the streaming media market. However a report by Pacific Crest Securities analyst, Andy Hargreaves suggested that in the current year, the company is going to prove its business model (which entirely revolved around global expansion as well as original media content).
However, Mr. Hargreaves has a rather bullish outlook on the stock of the media giant as he suggest that this global expansion will eventually report gains and profits. With its current expansion strategy, it is likely to take over the steaming media market and also be the biggest player. He released this report on Wednesday in which it suggest that the global distribution of its service is a ‘structural competitive advantage’ that the company has over all the old and new streaming media organizations in the business.
In 2016, the analyst is expecting the business to add up to 21.5 million subscribers globally; this subscriber count a year ago was at 17.4 million; while the year ended with a total of 74.75 million subscribers. He stated with great optimism that by the year 2024, the on demand video provider could have up to 195 million subscribers in total.
As for a future outlook, the analyst believes that the growth in the subscribers of the media company could result in incremental profitability in the upcoming years and furthermore is expected to drive ‘incremental investments in support of additional future growth’. Presently, Netflix stock has been given a rating of Overweight by the Pacific Crest analyst with a target price of $140.
Presently the stock is being traded at $91.61 per share at an increase. In a year’s time, the stock hit a high of $133.27 while a 52-week low of $58.46 was seen. Furthermore, earnings per share of $0.28 were reported by the organization with price to ratio of $326.26 – while the market cap of Netflix is at $40.45 billion.