Evercore ISI Mantains Sell on Netflix (NFLX) Following 3Q15 Earnings Results
Evercore ISI maintained a Sell rating and $69.00 price target on Netflix (NASDAQ: NFLX) following the company's 3Q15 earnings results. Netflix reported a weaker domestic net addition quarter of 0.88m, well below guidance/consensus of 1.2m. Management cited higher “involuntary churn” stemming from the industry switch underway to chip-based credit cards as a material contributor.
Analyst Ken Sena commented, "Our concern on NFLX shares (as laid out in our recent note: The Significance of Sub-Based Pricing) considers valuation in the context of increased video competition, as content owners work more handin-hand with OTT providers, audience platforms with developing CDN capabilities, and build their own app-based experiences to move with their audiences. We see this as causing NFLX to bear more content risk associated with its original programming strategy, even if the promise of hit content delivered on a global scale remains an attractive one for them and the industry. In terms of this quarter, we saw the performance as largely consistent with these concerns."
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Shares of Netflix closed at $110.23 yesterday.