According to analysts, Netflix Inc. (NASDAQ:NFLX) has a great potential in it. In accordance with this opinion, many analysts have increased their price targets. In this very vein, Youssef Squali, belonging to Cantor, has also elevated his price target to $500, whilst previously it stood at $450.Similarly Paul Vogel, from Barclays, has also increased the estimated price target of the company’s shares from $400 to $450.
In this context, Squali made a statement in which he expressed his opinion regarding Netflix Inc.(NASDAQ:NFLX). Squali asserted that the analyst firm was going to reinforce the company’s BUY rating along with boosting its price target from $450 to $500. The reason for this is the recent trend which favors Internet TV and will advertently prove to be profitable for Netflix Inc.(NASDAQ:NFLX).
This is because, Netflix Inc. (NASDAQ:NFLX) is basically a television network which operates through Internet. This network is spread over more than 40 countries and incorporates almost 44 million members. The only thing that the members require is an Internet-connected screen and via this connection any video, at any time and in any place in the world is brought at their disposal.The estimated price target suggested by Cantor Fitzgerald delineates a potential upside amounting to almost 17.65% in comparison to the company’s present price.
Netflix Inc. (NASDAQ:NFLX) serves as the largest and most affordable online platform which merely charges $8.99/month. At this reasonable rate, Netflix Inc. (NASDAQ:NFLX) provides access to a myriad of online videos. Therefore, Netflix Inc. (NASDAQ:NFLX) attracts a hoard of subscribers. The investment made by the company on content is much more than that of its competitors and thus can claim a better content assortment to its name.
In contrast to these highly optimistic opinions, Paul Vogel states that he merely elevated the company’s price target because presently shares are being traded at a rate of $425, whilst previously he had estimated a trading price of $400 per share. Analysts at Barclay have given an ‘Equal Weight’ rating to Netflix Inc.(NASDAQ:NFLX).
Vogel gave a statement in this regard with delineated the analysts’ ambivalent feeling about Netflix Inc.’s(NASDAQ:NFLX) stock. He asserted that although the company has shown a progressive growth, yet analysts are unsure about the stock value. There are several reasons which are responsible for this confusion. First is the fact that profit yielded from every customer is minimal. Secondly, the expenditure on content is large and last but not the least is the increasing competition worldwide.
Vogel further stated that increased content expenses would decrease the margins. Moreover, the number of US subscribers is likely to decrease and owing to these two factors, growth of stock doesn’t seem very likely in future.
The statistics collected from Bloomberg suggest that 45.8 percent analysts are rewarding Netflix Inc.(NASDAQ:NFLX) with a buy rating. On the other hand, 41.7 analysts have given it a Hold rating, while a small percentage of 12.5 has given it a call to sell. Furthermore, the past year has shown an increase of 12.1 percent in the company’s shares.
