Netflix Rises After Analyst Downplays Impact Of Alibaba Competition

NEW YORK (TheStreet) -- Netflix  (NFLX) shares have advanced after Needham raised its price target on the stock to $780 from $600, as the firm believes recent news of Alibaba's (BABA) entry into the Chinese streaming market is not a significant damper on the U.S. streaming video leader.

WHAT'S NEW: Needham's Laura Martin issued a research note on Netflix this morning, raising the stock's price target to $780 from $600 and reiterating a Buy rating. Martin notes the recent news of Alibaba's Chinese streaming service, but asserts that the research firm never incorporated China into its Netflix estimates in the first place. Netflix should see continued financial upside from high return on invested capital in international markets aside from China, said Martin, who adds that she believes Netflix will incorporate ad revenue "someday."

WHAT'S NOTABLE: The price target hike follows news of Alibaba's entry into the content streaming market, albeit only in China. Alibaba's "Tmall Box Office" has reportedly secured multiple partners among federal and municipal government entities within China, making the country an increasingly frigid market for Netflix. However, Needham's confidence in Netflix shares is built not on hopes of Netflix somehow grappling with Alibaba for Chinese dominance, but instead on expectations that the company should enjoy continued growth through original content and international expansion.

PRICE ACTION: Shares of Netflix are up more than 2% in afternoon trading, standing at $667.72 at time of writing.

Reporting by John Graff.

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