Netflix (NFLX) Stock Up on Comcast Deal
NEW YORK (TheStreet) -- Shares of Netlix (NFLX) - Get Report are climbing 1.55% to $98.17 in early-afternoon trading on Tuesday after reaching an agreement to put the streaming service onto Comcast's (CMCSA) X1 set-top box, Recode reports.
The agreement is similar to deals that Netflix has with smaller U.S. cable operators and with Apple (AAPL) and Roku, sources told Recode. Comcast viewers will be able to stream Netflix through Comcast's X1 entertainment platform.
Morgan Stanley mentioned a potential deal between the two companies in a recent report.
"We would expect Netflix to give up some economics, similar to other distribution partners like Apple or TiVo but we do not believe it would meaningfully alter the direction of Netflix profits over time," the firm wrote in a note. "Payments to distribution partners are reported in marketing expenses on Netflix's consolidated financials."
Netflix stock had fallen earlier today after Needhamdowngraded the stock on concerns about subscriber churn following Brexit.
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 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
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.