Netflix (NFLX) Stock Earnings Estimates Lowered at Pacific Crest
NEW YORK (TheStreet) -- Netflix's (NFLX) - Get Report fiscal earnings estimates were lowered for 2016 to 34 cents from 46 cents, and for 2017 to $1.20 from $1.72 at Pacific Crest this morning.
Additionally, the company's price target was lowered to $125 from $130 with an "overweight" rating.
The decrease in prices comes after the Los Gatos, CA-based film and TV streaming provider reported disappointing fiscal 2016 second quarter subscriber numbers on Monday.
Netflix reported 1.7 million subscribers, compared to its own expectations of 2.5 million.
Pacific Crest believes the streaming company is struggling to adapt a higher-price model, according to the analyst note. "Netflix's price increase is not going as well as planned, but stable gross additions suggest that continued improvements in content are driving attraction to the service at a relatively stable rate."
The firm says it still recommends Netflix stock as it is "positioned to be a leader in global video." "Despite soft Q2 results and Q3 guidance, we continue to believe Netflix's core competitive advantages and long-term opportunity are intact, and that growth can reaccelerate following the negative impact of the price increase."
Shares of Netflix are down 13.64% to $85.33 in mid-morning trading.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate NETFLIX INC as a Hold with a ratings score of C+. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow.
You can view the full analysis from the report here: NFLX
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