Sub Gains, Content Costs Key for Netflix (NFLX) in Q4 - Guggenheim
Guggenheim reaffirms Netflix (Nasdaq: NFLX) with a Buy rating and $160 price target heading into the company's Q4 report, which is expected out after markets close today.
The firm is looking for Netflix to post Q4 EPS of $0.02 with revenue of $1.82 billion. Paid domestic net adds are seen at 1.30 million with total net adds at 1.65 million. International net adds are expected at 3.10 million with total international net adds at 3.50 million.
Analyst Michael Morris noted the following key points that investors will be focused on:
1) domestic subscriber trends;
2) international subscriber trends; and
3) content costs.
The analyst continued: Our conversations indicate that a bear case focused on the company reporting fewer than the guided 1.65mm domestic net subscriber additions is widely held. Management commentary relative to its consistently noted 60-90mm U.S. subscriber addressable audience and 1Q16 outlook will likely drive domestic sentiment.
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