I think Netflix (NASDAQ:NFLX) will find buyers today. Here's why:
- Wedbush is upgrading NFLX to Buy from Hold this morning.
- Lazard is out with positive comments saying May website traffic suggest possible 2Q09 subscriber upside. If monthly churn in 2Q09 is 4.4%, consistent with their model and Netflix guidance for a normal seasonal rise, then Netflix, based on the stronger comScore correlation, would exit 2Q09 with 10.7 mln subscribers, vs guidance for 10.4-10.6 mln, and consensus near the midpoint of guidance.
- Citigroup is out reiterating their Buy and $52 tgt on the name after meeting the co's management. WThey view the 4 broad factors from their 4/26 upgrade as well intact: 1. NFLX has one of the sector’s strongest fundamental outlooks; 2. NFLX is one of the sector’s most economically defensive stocks; 3. NFLX has deeper than realized competitive moats; and 4. NFLX’s valuation relative to growth is very reasonable.
Despite a tough comp, Q2 QTD unique visitor growth (with both April and May data now in) remains strong at 28% Y/Y. At the margin, this gives the firm greater conviction in their Q2 Gross Sub Adds estimate of 1.73MM.
Notablecalls: Short interest still stands at a whopping 28% and the stock is down over 10 pts from its $50 highs. These calls are likely to get it moving up again. I'm not a buyer here at $39+ but will be keeping an eye out.
- Wedbush is upgrading NFLX to Buy from Hold this morning.
- Lazard is out with positive comments saying May website traffic suggest possible 2Q09 subscriber upside. If monthly churn in 2Q09 is 4.4%, consistent with their model and Netflix guidance for a normal seasonal rise, then Netflix, based on the stronger comScore correlation, would exit 2Q09 with 10.7 mln subscribers, vs guidance for 10.4-10.6 mln, and consensus near the midpoint of guidance.
- Citigroup is out reiterating their Buy and $52 tgt on the name after meeting the co's management. WThey view the 4 broad factors from their 4/26 upgrade as well intact: 1. NFLX has one of the sector’s strongest fundamental outlooks; 2. NFLX is one of the sector’s most economically defensive stocks; 3. NFLX has deeper than realized competitive moats; and 4. NFLX’s valuation relative to growth is very reasonable.
Despite a tough comp, Q2 QTD unique visitor growth (with both April and May data now in) remains strong at 28% Y/Y. At the margin, this gives the firm greater conviction in their Q2 Gross Sub Adds estimate of 1.73MM.
Notablecalls: Short interest still stands at a whopping 28% and the stock is down over 10 pts from its $50 highs. These calls are likely to get it moving up again. I'm not a buyer here at $39+ but will be keeping an eye out.
Good overview NC. I'm staying short but the fundamentals sure are sweet.
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