You will be redirected back to your article in seconds

Netflix Stock Pops to Record High on Bullish Analyst Forecast for International Profits

Shares of Netflix streamed to record-high territory Thursday after a Wall Street analyst issued a report arguing that investors are underestimating the company’s prospects for international profitability.

Netflix’s stock, which historically has been fairly volatile, climbed 3.5%, to $163.28 as of 12:30 p.m. ET after trading as high as $163.84 per share earlier. With the jump, Netflix has a market cap of more than $70 billion.

UPDATE: Netflix shares closed Thursday at $163.05, up 3.4% for the day, an all-time high closing price.

In a note to clients Thursday, Piper Jaffray analyst Michael Olson raised his 12-month price target on Netflix shares 14.5%, from $166 to $190 per share. That’s because, according to Olson, consensus expectations for Netflix’s earnings per share are far too low for 2020 given his expectations for international operations to achieve penetration and margins comparable to its U.S. base.

“While Netflix currently has a limited content offering outside of the U.S. and has done less marketing in many of the recently entered countries, we believe that, by 2020, there is potential for market penetration higher than current estimates,” Olson wrote.

Netflix had 47.9 million international members at the end of the first quarter of 2017, more than doubling in two years. Given its current trajectory overseas, Olson opined, Wall Street’s $4.99 earnings per share consensus estimate for 2020 consensus for Netflix would be 100% too low.

During Q1 2017, Netflix’s international streaming contributed $43 million in operating profits. It was the first quarter of consolidated profit for the non-U.S. segment, as “more mature territories offset investments in newer markets,” Netflix said in its investor letter.

“Our forward guidance shows that we intend to continue to invest internationally, projecting a small loss for Q2,” the company added. Netflix forecast an operating loss of $28 million on $1.14 billion revenue for the overseas segment for the second quarter of 2017.

More Digital

  • 'Darkwood' Delivers Surreal Horror to Nintendo

    'Darkwood' Delivers Surreal Horror to Nintendo Switch

    “Darkwood” is the sort of game you might not expect to find on the Nintendo Switch: It’s dark, violent, and immensely unsettling. But the top-down survival horror title is also an excellent fit for the platform, the sort of evocative experience that a player can methodically pick at in short stints, or sink into for [...]

  • MLB All-Star Game

    T-Mobile’s MLB.tv Subscription Giveaway Available Now

    T-Mobile is once again giving its customers free access to MLB.tv, Major League Baseball’s streaming service. The telco began giving away access to the streaming service Tuesday; anyone interested in signing up has until April 1 to do so. MLB.tv allows subscribers to stream regular season games on mobile and TV connected devices, and is [...]

  • The Federal Trade Commission building in

    FTC to Examine Privacy Practices of Major Internet Providers

    WASHINGTON — The Federal Trade Commission said it is launching an examination of the privacy practices of major internet providers including AT&T, Verizon, and Comcast to study how they use consumer information. Capitol Hill lawmakers have been giving added scrutiny to the tech industry’s use of consumer data for more than a year, but much [...]

  • Jessica Rodriguez Strictly Business Podcast

    Listen: Univision's Jessica Rodriguez on Shaking Up a Traditional TV Brand

    With new leadership in place at Univision, the network is evolving in ways its fast-growing Hispanic audience in the U.S. might find surprising. Look no further than the broadcaster’s primetime schedule, according to Jessica Rodriguez, CMO of Univision Communications and president/COO of Univision Networks, who relied on audience research to shake up traditional notions of [...]

  • Electronic Arts Logo

    EA Laying Off 350 People, About 4% of Staff

    Electronic Arts is laying off about 350 of its 9,000-person staff, CEO Andrew Wilson announced in a blog post on its website Tuesday. In the brief, open letter, Wilson noted that the move was made to “address our challenges and prepare for the opportunities ahead,” and to “better deliver on our commitments, refine our organization [...]

  • How Will Apple TV+ Impact Netflix?

    How Will Apple TV+ Shake Up Netflix? Analysts Are Split

    Is Apple’s star-fueled streaming service a “Netflix killer” — or just another incremental challenger chasing the market leader? Wall Street don’t agree on whether Apple TV+ will put a big dent in Netflix’s subscriber momentum with the debut of its premium subscription VOD service later this year. At its splashy unveiling Monday, Apple trotted out [...]

  • iHeartMedia Strikes Multi-Year Deal With LiveXLive

    iHeartMedia Strikes Multi-Year Deal With LiveXLive

    iHeartMedia today announced a multi-year agreement with LiveXLive, a digital media company focused on live entertainment. According to the announcement, the deal combines content, production, distribution and promotion. The newly expanded partnership gives LiveXLive exclusive global livestreaming rights for 17 iHeartRadio marquee events this year, including iHeartRadio’s ALTer Ego, iHeartCountry Festival, iHeartRadio Wango Tango, Daytime Stage at [...]

More From Our Brands

Access exclusive content