4 Major Keys For Netflix Going Forward

With Netflix, Inc. NFLX reporting disappointing subscriber statistics for the first quarter, UBS highlighted four major keys for the company going forward.

• Question on whether the second quarter guidance is conservative, given a strong content line-up and easy price-increase comps
• Possibility of further distribution partnerships, particularly in the U.S.
• Whether the writers end up striking in Hollywood and any timing impact for Netflix originals
• What practical impact, if any, will come from any FCC revisions to Net Neutrality

"Our ‘17 estimates are little changed with subscriber and profitability trends in line for 1H17 and mgmt commentary around full year trends unchanged," the firm said of its outlook.

2017 Could Be Another Strong Year

UBS' read of the first quarter results and guidance suggests 2017 is likely another year of strong growth. Despite difficult comps against the first quarter 2016 global launch, the firm noted international net adds were tracking higher than 2016.

This dynamic, according to UBS, indicates there must be real traction in Europe and Asia, while older markets are sustaining.

"We expect investors will view this favorably and discount increased visibility for sustained int'l growth," the firm added.

UBS has a Buy rating and a $175 price target on shares of Netflix.

At time of writing, Netflix shares were down 1.91 percent at $144.43.

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