Netflix (NFLX) Should Report Meaningful Upside - Stifel

Stifel analyst, Scott Devitt,reiterated his Buy rating on shares of Netflix (NASDAQ: NFLX) after the company announced 13% to 18% price increases in the U.S.. The company's Basic plan is now $8.99 per month, Standard $12.99, and Premium $15.99, from $7.99, $10.99, and $13.99, respectively. The new prices are effective immediately for new subscribers, while existing customers will see the new pricing during the next three months.

The analyst stated "We plan to update our model following the company’s 4Q earnings report on Thursday after the close, but expect meaningful upside to our 2019 revenue growth estimate (currently +25.8% y/y) as a result of the pricing increase, as our estimate is based on +7% domestic ASP growth and +3% international ASP growth assumptions. We would expect our domestic ASP growth estimate to increase by ~10ppts to +17% for FY:19, which would increase our total revenue growth forecast to over +30% y/y in 2019 and add an incremental $100mm+ in operating profit (we assume no change to the company’s expected 13% operating margin for 2019), all else equal".

Since the analyst has not yet updated his model for the increase there is no change to the price target of $380.

For an analyst ratings summary and ratings history on Netflix click here. For more ratings news on Netflix click here.

Shares of Netflix closed at $356.01 yesterday.

You May Also Be Interested In

• onsemi downgraded by TD Cowen after Synaptics deal clouds growth story
• Darden Restaurants (DRI) PT Raised to $240 at UBS as Stock Remains a 'Quality Compounder'
• Freedom Broker Starts Copart (CPRT) at Buy