Netflix (NFLX) Stock Gains, Analysts Forecast Strong Long Term Growth
Bloomberg News
NEW YORK (TheStreet) -- Before Friday's market open, Netflix (NFLX) - Get Report stock was initiated with a "buy" rating and a $120 price target at Canaccord because of the company's strong outlook in the long term.
Shares of the online video streaming provider are rising 4.98% to $96.04 in afternoon trading.
Netflix's subscriber growth, especially in international markets, could grow significantly in the medium and long term, Canaccord analysts wrote in a note released this morning.
"With vast potential in the other 179 markets and the potential to move from a top-of-market skim product to more of a mass-market product internationally, we see a long runway for growth," analysts noted.
Analysts estimate that the company's international paid subscribers could reach 98.8 million by 2020 and 165.2 million by 2025, compared with 34.53 million subscribers at the end of the 2016 first quarter.
"In the U.S., competitive offerings will proliferate, but in a new un-bundled OTT world..., Netflix should move from being a substitute good to a complementary good relative to cable, and this should foster continued growth domestically," analysts explained.
Analysts are projecting U.S. subscribers will increase to 74.3 million by 2025 from 46.97 million at the end of March.
Separately, Netflix has a "hold" rating and a letter grade of C+ at TheStreet Ratings because of the company's robust revenue growth, expanding profit margins and increase in net income, which offsets generally disappointing stock performance, generally higher debt management risk and disappointing return on equity.
You can view the full analysis from the report here: NFLX
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 article's author.