Netflix (NFLX) PT Raised to $60 at Wedbush; FCF Burn Being Overlooked
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Wedbush analyst Michael Pachter raised his price target on Underperform-rated Netflix (NASDAQ: NFLX) to $60.00 (from $50.00) following Q3 results. Pachter said FCF burn is being overlooked as investors focus on sub growth.
Pachter commented, "We continue to believe that Netflix is overvalued. Netflix continues to spend exorbitantly for original and exclusive content, while international profitability remains elusive and competition for both content and subscribers is becoming more fierce. In addition, cash burn is unacceptably high, and we are skeptical that the company can successfully build a content library that will justify its high level of spending. In our view, Netflix's current share price fails to address the potential for meaningful competition from Amazon, which recently launched a video-only subscription option of its own, and although we acknowledge that Netflix has the much more powerful brand for SVOD, we are confident that with its new standalone service, Amazon declared war on Netflix."
Shares of Netflix closed at $99.80 yesterday.
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