- JPMorgan analyst Doug Anmuth says Netflix Inc (NASDAQ:NFLX) shares "remain controversial" as the in-line Q4 subscribers and "light" Q1 outlook are driving lower growth expectations and increased questions around subscriber penetration impact of content and competition.
- However, he believes solid secular growth remains in global streaming and that Netflix's penetration of global broadband households excluding China is less than 30%.
- In addition, his analysis of Apptopia data almost halfway through Q1 suggests that the company is tracking ahead of plan.
- Related Content: Netflix Falls On Q4 Earnings Results: Here's Why And What Investors Need To Know
- If Netflix were to continue the quarter at its current pace, net additions could be 5 million-plus, compared to the 2.5 million guidance, Anmuth tells investors in a research note.
- He reiterated an Overweight rating on the shares with a $605 price target (56.5% upside) but cautioned that the potential subscriber impact from the recent price increase "may lie ahead."
- Price Action: NFLX shares traded higher by 1.01% at $390.57 on the last check Friday.
