Netflix, Inc. NFLX is scheduled to report first-quarter results April 16 after the close. The print is likely to come in ahead of consensus estimates due to a strong content slate, new distribution partners and returns from marketing investments, according to Goldman Sachs.
The Analyst
Goldman Sachs' Heath Terry maintains a Buy rating on Netflix's stock with a price target lifted from $315 to $360.
The Thesis
Terry is modeling for the following metrics in Netflix's Q1 report. (See the analyst's track record here.)
- 1.7 million net subscriber additions in the U.S. market and 5.6 million international net subscribers versus Netflix's guidance of 1.45 million and 4.9 million, respectively.
- Average revenue per user growth of 10.5 percent domestically and 20.5 percent internationally.
- Revenue of $3.7 billion.
- Incremental marketing spend that will result in marketing deleverage of 320 basis points versus last year.
- Net income of $284.1 million.
- Earnings per share of 63 cents.
Beyond Q1, Terry said he expects the following from Netflix:
- Cash burn that grows from $2 billion in 2017 to $3 billion for the full year 2018.
- 6 million net adds in the second quarter versus the consensus estimate of 5.2 million net adds.
- Longer-term subscriber growth and profit that exceeds consensus estimates.
Price Action
Shares of Netflix were trading higher by 3.75 percent at the time of publication Wednesday morning.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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