The second quarter is typically a soft one for Netflix Inc. subscriber additions, but Canaccord analyst Michael Graham believes the streaming giant will far exceed subscriber expectations. Graham, who rates Netflix a buy with a $175 price target, is forecasting that Netflix will report domestic subscriber additions of 1.1 million, compared with analysts consensus of 631,000, according to FactSet. While that would likely be driven by the timing of content releases, it would still be significant as Netflix’s growth in the U.S. has slowed. “We believe Netflix is firing on all cylinders, with a robust original content pipeline buoying domestic subscribers, expanded localization efforts increasing international penetration and long-term building blocks being put in place to solidify sustainable growth,” Graham wrote in a note to investors. “While our net add estimates are meaningfully above consensus, we think the company can hit our expectations given a strong Q2 slate.” Last year during the same second-quarter period, Netflix reported adding 1.7 million subscribers, which was below Wall Street expectations of 2.5 million adds. Shares of the streaming company were pummeled in after-hours trading following that earnings report. Netflix will report its earnings for the second quarter after the market closes on Monday. Netflix shares have gained more than 29% in the year to date. By comparison, the S&P 500 index is up nearly 10%, while the Dow Jones Industrial Average up more than 9% and the tech-heavy Nasdaq Composite index is up more than 17%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
Latest posts by Market Watch (see all)
- Trump Foundation shutting down to avoid conflicts of interest: report - November 20, 2017
- Market Extra: Bitcoin breaks $8,000 milestone and keeps on rising - November 20, 2017
- Earnings Outlook: Salesforce earnings: Analyst surveys pointing to a strong quarter - November 20, 2017