TECH - Netflix Earnings Expectations Prompt Bull To Revise Stock View: 'Expect Growth To Accelerate Next Year...' | Benzinga
As the earnings season kicks off for tech stocks this week, Netflix Inc. (NASDAQ:NFLX) is feeling the pressure of balancing its growth aspirations and margin targets.
According to a report by Barron’s, UBS analyst John Hodulik suggests that benefits from Netflix’s clampdown on password sharing and the introduction of ad-supported streaming may not be immediate. Consequently, Hodulik lowered his target price on the stock from $525 to $500, while maintaining a Buy rating.
"For 3Q [third quarter], we expect flat ARPU [average revenue per user]…given limited price increases but expect growth to accelerate next year as accretion from paid sharing builds & new price ups are likely implemented," Hodulik wrote.
Despite a 21% increase in the stock’s value this year, it has seen a significant drop from over $450 in July. This decline has been primarily due to investors’ disappointment over cautious remarks on margins and subscriber growth last month.
See Also: No Legit Excuse For Positive THC Test, New Rules Double Weed License Fees & Latest Reg Updates
Hodulik anticipates that Netflix will report the addition of about six million subscribers in the third quarter on ...