Netflix: Color on Quarter -->
- Stifel raises their NFLX tgt to $345 from $325. Netflix posted another quarter of broad-based outperformance, reaching 125mm total subscribers globally. Additionally, 2Q guidance beat Street expectations for net adds by ~ +1mm, as the co expects to have ~131mm subs in the quarter. Netflix modestly raised its outlook for operating margin for the year to 10%-11%, from 10% previously, and reiterated its outlook for negative FCF of $3.0B-$4.0B. They are increasing estimates on strong results / 2Q trends; they however remain Hold rated given current valuation levels
- Pivotal Research raises tgt to $420 from $400. Overall, NFLX 1Q result continues the strong subscriber trends from the last 6 quarters a trend that is expected to continue for the balance of '18 and importantly NFLX is doing it spending less than anticipated. Post results they raised their raised their '18 net new U.S. sub results from +5.1M to +5.7M and their international subs from +19.3M to +21.7M. They also tweaked their cost forecasts moderately lower and raised their '19 and beyond subscriber forecasts.
- B. Riley FBR raises tgt to $313 from $243 on margin upside after Netflix topped its global streaming sub guide for 1Q18 by 1M—not the 2M of 4Q17, but still healthy and above the in-line qtr they were anticipating after comparing steady growth in Google search volumes in 1Q18 and 4Q17 to a more robust guide for sub growth in 1Q18. But at a P/E over 100x, its hard to craft a responsible valuation argument for owning this equity. Netflix's success is increasingly looking like a headwind for traditional TV networks.
- Monness Crespi Hardt raises tgt to $375 from $350. Netflix reported strong 1Q18 results that exceeded Street estimates and our projections. Global streaming net additions came in above expectations and streaming revenue (up 43% YoY) grew at the fastest rate ever, driven by a rapidly growing base of new memberships and a higher ASP. In their view, Netflix is delivering the content to keep customers engaged and willing to pay a 14% higher ASP than year ago. Despite a 60% rise this year, Netflix delivered results that they believe will keep the stock headed in an upward trajectory
- Needham notes Netflix reported strong 1Q18 financial results. They raise 2Q18E projections to $15.97B of revenue (up 37% y/y), $2.77 of EPS (up 121% y/y) and total paid subs of 125.2mm at 6/30/18 (vs their prior estimate of 124.6mm), based on guidance. NFLX stated that its growth is being driven by global adoption of OTT viewing. They prefer Roku (ROKU) because it trades at half of NFLX's valuation, has better projected FY18E FCF, more global upside, and benefits from new (ie, DIS) OTT channel launches, which threaten NFLX's dominance.
- Oppenheimer raises their NFLX tgt to $370 from $285
NFLX +7% near early March all-time highs premarket.