Positive first-quarter results sent Netflix shares soaring, pushing its value above CBS Corp, the highest rating broadcast television network in the U.S.
After reporting first quarter earnings on Wednesday, there is no question about the significance of Netflix (NASDAQ: NFLX) being able to increase its market value to rise above TV network giant CBS Corp. It’s quite clear that the streaming TV company is determined to outplay its rival, HBO and to replace linear TV with on-demand, ad-free programming worldwide. A few years ago, Netflix was the most watched cable channel in the US and it seems that the company is driven to position themselves as the most watched service worldwide. As a result, Based on this, is it possible that the share price of Netflix could rise to as much as $900 by next year?
Barton Crockett, an FBR Capital Markets analyst, noted that Netflix subscribers, which make up almost 40 percent of TV households in the US, love the service even more that watching regular television. Crockett also went on to recommend a Buy on the stock and he raised his one year price target from a previous $400 to $900.
Earning the title of best performing stock on the S&P 500 index (SPX) this year, Netflix saw a further price increase of 18% on Thursday with shares trading at $562.05. Netflix also reportedly grew by an additional 4.9 million subscribers in the first-quarter this year compared to the 4 million it added for the same quarter last year. This growth is in addition to the 8.2 million subscribers outside of the U.S that it managed to gain over the past year.
While there has been a decrease of 38 cents a share in net profit from $53.1 million to $24 million for the first quarter which was attributed to the strong U.S. dollar (USD), Netflix still reported steady profits of 77 cents a share. Interestingly, Cantor Fitzgerald also raised its estimate to $500 earlier this week which Netflix already sailed past on Thursday.
MT4 Chart: Netflix
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