Netflix (NFLX) PT Raised to $125 by RBC Capital's Mahaney; Calls Quarter 'Sense8-tional'
RBC Capital analyst Mark Mahaney reiterated an Outperform rating and boosted his price target on Netflix (NASDAQ: NFLX) to $125.00 (from $100.00) after the company beat both U.S. and International Sub expectations, with new popular Original Content shows (like Sense8) driving demand.
The keys to the quarter, according to Mahaney: 1) Domestic Sub Results – Q2 U.S. Net Adds continue to accelerate, and the Q3 outlook implies that ’15 Sub Adds will exceed ’14. 2) Domestic ARPU Solid – ASPs up 5% Y/Y, and we haven’t yet seen the full impact of the $1 price increase; 3) International Subs – Net Adds came in at 2.37MM, handily beating the Street’s expectation of 1.94MM; 4) Q3 International Guide – Contribution Loss Guide materially better/lower than Street expectations. & 5) FCF – $229MM FCF loss seen in Q2 (vs. $163MM loss in Q1) was the largest seen so far, but this trend will likely continue given major new market and content launches on the horizon.
2016 Revenue increases to $8.81B from $8.35B, while GAAP EPS decreases to $0.09 from $0.11, due to assumed accelerated International launches
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Shares of Netflix closed at $98.13 yesterday.