Wedbush Remains Bearish on Netflix (NFLX) Following 3Q Earnings Results

Wedbush maintained an Underperform rating and $40.00 price target on Netflix (NASDAQ: NFLX) following the company's 3Q15 earnings results. Revenue was $1,738 million vs. consensus of $1,751 million.

Analyst Michael Pachter commented, "The chip-card excuse may be sincere, but we think pricing is to blame. Revenue was $1,738 million vs. our estimate of $1,767 million and consensus of $1,751 million. Netflix missed estimates as net domestic streaming subscriber additions decelerated well below its guidance. Management attributed the miss to “involuntary” churn as members failed to update their account details after their credit cards were replaced; the transition to chip-based credit cards will likely continue through the next few quarters. We think it is far more plausible that a combination of price increase and saturation drove churn. International subscriber growth was well above guidance, due to original programming and geographic expansion. Netflix stated that European price increases did not impact growth."

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 $110.23 yesterday.

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