Blockbuster Q4 Shows Netflix Still Wears The Crown

Netflix, Inc. NFLX after Monday's close reported its fourth quarter results, which included a strong top and bottom-line beat and the net addition of 8.3 million new users across the world.

The Analyst

KeyBanc Capital Markets' Andy Hargreaves maintains an Overweight rating on Netflix's stock with a price target boosted from $270 to $300.

The Thesis

Netflix showed in its fourth quarter report it boasts the necessary "global reach and data feedback loop" that none of its competitors can match, Hargreaves said in a note. This results in Netflix growing its competitive advantage, which will continue to expand over time and drive even more share gains in the foreseeable future.

The addition of 8.3 million net global customers exceeded the 6.3 million estimate Hargreaves was modeling. In addition, management's guidance of adding a net 6.35 million new users in the first quarter of 2018 is also ahead of the 5.0 million estimate and confirms the company's ongoing momentum continues.

Looking forward to the full year 2018, the analyst expects Netflix's global net additions to total 22.9 million, which is up from a prior estimate of 20.6 million. The analyst's 2019 numbers moved higher from 18.8 million to 19.8 million net additions.

Bottom line, Netflix remains a clear global leader within the "professional video in the internet era" and investors should continue buying the stock.