Netflix (NFLX) Could Be Biggest Loser Following Net Neutrality Decision - Analyst
Tweet
Share
E-mailGet Alerts NFLX Hot Sheet
Price: $355.88 -1.73%
Rating Summary:
34 Buy, 26 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 37 | New: 17
Rating Summary:
34 Buy, 26 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 37 | New: 17
Trade Now!
Join SI Premium – FREE
Wedbush maintains an Underperform rating and $160 price target on Netflix (Nasdaq: NFLX) following the recent ISP regulation verdict, which is highlighted here.
Analyst Michael Pachter sees the verdict playing out two ways. First, Netflix could undergo an extreme rise in costs as it pays companies like Verizon (NYSE: VZ) and AT&T (NYSE: T) for better, faster Internet service.
On the other hand, ISPs are likely to aim for maximal profit, charging Internet-focused companies as much as the government will permit across the board.
Pachter sees ISPs looking for a set fee per gigabyte (GB) of data transmission. Should that be the right call, then Netflix will most likely see a higher cost for service versus the broader market, with no incremental benefit. The analyst observed,
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 $337.96 yesterday, with a 52 week range of $95.75 - $389.16.
Analyst Michael Pachter sees the verdict playing out two ways. First, Netflix could undergo an extreme rise in costs as it pays companies like Verizon (NYSE: VZ) and AT&T (NYSE: T) for better, faster Internet service.
On the other hand, ISPs are likely to aim for maximal profit, charging Internet-focused companies as much as the government will permit across the board.
Pachter sees ISPs looking for a set fee per gigabyte (GB) of data transmission. Should that be the right call, then Netflix will most likely see a higher cost for service versus the broader market, with no incremental benefit. The analyst observed,
Netflix has approximately 30 million users in the U.S. watching an estimated 40 hours of content per month. Standard definition video content contains around 1 GB of data for each hour, while 1080p HD content contains around 6.5 GB of data for each hour, when streamed to a 40 – 50” television (data per hour is much lower for streams to phones or tablets). Based on these assumptions, Netflix customers in the U.S. consume between 14.4 billion GB and 93.6 billion GB of data per year. In our view, ISPs will seek to monetize the repeal of the Net Neutrality rules by imposing a fee on data providers like Netflix on a usage basis.
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 $337.96 yesterday, with a 52 week range of $95.75 - $389.16.
Create E-mail Alert Related Categories
Analyst Comments, LitigationSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
