Analysts Love Netflix's Earnings: Should You Buy This Stock?

    Analysts Love Netflix's Earnings: Should You Buy This Stock?   When subscribers hit an inflection point and earnings rise, it's worth taking a closer look at the streaming-TV company's stock. Netflix NFLX (NASDAQ) $674,05 +11,13 (+%1,68) stock rose 6.5% after its quarterly earnings report released last week. So while not all analysts are bullish on Netflix, more than 10 analysts have increased their price targets for the stock. This proves that Netflix is ​​doing something right. Are the Netflix bulls right? Even if the streaming TV giant's shares are trading at all-time highs, can it still be considered a good opportunity?

Key third quarter implications.

Netflix reported that it added a much higher net new than expected 4,4 million members in the third quarter. This helped boost earnings per share to $3,19 from $1,74 a year earlier. Investors want to see sustained growth in average revenue per subscription over the long term from Netflix, which has pricing power. Pricing power is particularly important as the company does not make any money from advertisements.

Analysts Love Netflix's Earnings: Should You Buy This Stock?

  Also, Management said that things are going well, although it doesn't provide much context on game plans as it's still in the early stages of testing. “We have a positive trajectory,” said Greg Peters in charge of his early efforts in the gaming space, implying that the overarching goal of the gaming strategy is to help increase user engagement.

Netflix stock: buy, sell or hold?

According to some Analysts, Netflix's high price/earnings ratio of 60 is considered to be quite conservative with more context. While affiliate TV ads are certainly a great growth opportunity, it may be beneficial for some investors to have a subscription-only gaming model as well. It is known that many investors rely on at least some of their investments in digital advertising. Netflix remains one of the best investments available for those looking to invest in a platform model that is not dependent on digital ads. The company's robust business model and strong earnings momentum suggest bullish analysts may be right about the stock and the shares continue to look attractive even at 60x earnings.  

Source: The Motley Fool

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