Piper Jaffray Reiterates Overweight On Netflix, Even After Revenue Miss (NFLX)

Piper Jaffray is out with some color on the Netflix NFLX quarter and is reiterating its overweight rating and $140 price target, despite the revenue miss from the company yesterday. In the report, Piper Jaffray notes "Q2 results showed impressive profitability driven by increased streaming, but also had, what the Street will perceive to be, a few blemishes. SAC was above consensus due to increased marketing and ARPU was below consensus as subscribers shift towards the $8.99 unlimited streaming plan. We expect profitability per sub will continue to move higher and key metrics like GM, SAC, and churn improve as subs increase Watch Instantly usage. That said, investors should be aware that the path of increased profitability will likely not be a straight line up and to the right, due to seasonal patterns and lumpy content expenses. We are reiterating our Overweight rating and price target of $140. Shares of the online entertainment company are getting hammered this morning, trading down 11.15% to $106.31.