Wedbush Maintains an 'Underperform' on Netflix (NFLX); Q1:11 Preview: Expect Upside; Investors Focused on Dramatic Subs Growth and Operating Leverage
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Price: $78.16 -0.1%
Rating Summary:
57 Buy, 26 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
57 Buy, 26 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wedbush maintains an 'Underperform' on Netflix (NASDAQ: NFLX), PT $80.
Wedbush analyst says, "We expect Q1 results in-line with our estimates for revenue of $715 million, ending subs of 23.7 million, and EPS of $1.13, compared with consensus for revenue of $704 million and EPS of $1.07. Q1 guidance is for revenue of $694 – 717 million, ending subs of 22.65 – 23.7 million, and EPS of $0.90 – 1.13...Netflix is unlikely to provide detailed FY:11 guidance."
"We expect streaming content costs to increase by at least $500 million in 2011. In this note, we have estimated the cost of each current streaming content deal, and estimate that the cost of these deals has risen from around $180 million in 2010 to a likely case of $1.975 billion in 2012. Netflix has not confirmed financial terms of studio deals, but it is clear that streaming costs will rise significantly in the near future (although likely after Q1:11), more than offsetting declining fulfillment, marketing, DVD purchase and postage expenses."
For more ratings news on Netflix click here and for the rating history of Netflix click here.
Shares of Netflix closed at $235.49 yesterday.
Wedbush analyst says, "We expect Q1 results in-line with our estimates for revenue of $715 million, ending subs of 23.7 million, and EPS of $1.13, compared with consensus for revenue of $704 million and EPS of $1.07. Q1 guidance is for revenue of $694 – 717 million, ending subs of 22.65 – 23.7 million, and EPS of $0.90 – 1.13...Netflix is unlikely to provide detailed FY:11 guidance."
"We expect streaming content costs to increase by at least $500 million in 2011. In this note, we have estimated the cost of each current streaming content deal, and estimate that the cost of these deals has risen from around $180 million in 2010 to a likely case of $1.975 billion in 2012. Netflix has not confirmed financial terms of studio deals, but it is clear that streaming costs will rise significantly in the near future (although likely after Q1:11), more than offsetting declining fulfillment, marketing, DVD purchase and postage expenses."
For more ratings news on Netflix click here and for the rating history of Netflix click here.
Shares of Netflix closed at $235.49 yesterday.
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