Netflix (NFLX) Stock Gains, Pacific Crest Bullish on International Growth
NEW YORK (TheStreet) -- Shares of Netflix (NFLX) - Get Report are rising 1.17% to $97.56 in late-morning trading on Thursday after Pacific Crest contended that the video streaming service can grow global subscribers above estimates.
The firm conceded that "there is little doubt that the U.S. business is slowing," but the deceleration is "widely anticipated" and "not a detriment to the business model or future growth potential."
Such concerns provide an "attractive" buying opportunity ahead of what will probably be an acceleration in global adoption, Pacific Crest contended.
"Internationally, we believe subscriber growth potential remains tremendous and can continue to fuel the beneficial cycle of content reinvestment that has separated Netflix from its competitors," Pacific Crest said.
Growth in Netflix's global revenue base around a largely fixed-cost structure is the "key dynamic" to the long-term durability of the company's business model, the firm noted.
Pacific Crest estimates 4.8 million domestic net additions in 2016 and 13.9 million international net additions.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C+.
Netflix's strengths such as its robust revenue growth, expanding profit margins and solid stock price performance are countered by 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
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.