Cantor Fitzgerald Cuts Netflix (NFLX) to Hold
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Price: $80.34 -1.14%
Rating Summary:
58 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 5 | Down: 11 | New: 27
Rating Summary:
58 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 5 | Down: 11 | New: 27
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Cantor Fitzgerald downgraded Netflix (NASDAQ: NFLX) from Buy to Hold with a price target of $260.00. Analyst Youssef Squali noted concerns about content cost and international investment.
"Given the lumpiness of content deals, management changed its domestic streaming contribution margin target to +400bps/year, from +100bps/quarter. However, given that 3Q:13 guidance calls for +130bps Q/Q improvement (to ~23.8%), and 4Q:13 is expected to be up ~400bps Y/Y (to 22.5%), this implies a 130bps Q/Q decline in margin, due to stepped-up content spend. Further, plans to grow international investments ahead of revenues and losses from the Netherlands launch should exacerbate content costs near-term," said Squali.
"While Netflix is performing to expectations, we believe that the shares have more than reflected the short-term outlook, at 3.5x revenue and 40.3x EBITDA on FY:13 estimates," he added.
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 $264.58 yesterday.
"Given the lumpiness of content deals, management changed its domestic streaming contribution margin target to +400bps/year, from +100bps/quarter. However, given that 3Q:13 guidance calls for +130bps Q/Q improvement (to ~23.8%), and 4Q:13 is expected to be up ~400bps Y/Y (to 22.5%), this implies a 130bps Q/Q decline in margin, due to stepped-up content spend. Further, plans to grow international investments ahead of revenues and losses from the Netherlands launch should exacerbate content costs near-term," said Squali.
"While Netflix is performing to expectations, we believe that the shares have more than reflected the short-term outlook, at 3.5x revenue and 40.3x EBITDA on FY:13 estimates," he added.
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 $264.58 yesterday.
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