Piper Jaffray Notes Suggested Upside for Netflix

Piper Jaffray released its report on Netflix NFLX suggesting upside for NFLX. In a note to clients, Piper Jaffray writes, "We are modeling for Netflix gross sub adds of 5.04m in Q4 (decelerating growth) and web traffic data for the first month of Q4 is showing only a slight deceleration in growth. Average unique visitors to Netflix.com were up 38% y/y in the first 2 months of Q4, a slight deceleration from up 41% y/y in Q3 (down 3 percentage points). But we are modeling for growth in Netflix gross sub adds to decelerate by 8 percentage points, from 88 y/y in Q3 to 80% y/y in Q4. In other words, ComScore data through the first two months of Q4 suggests slight upside to our gross adds estimate in Q4." Piper Jaffray maintains its Overweight rating and $202 price target on NFLX. NFLX closed yesterday at $191.05.