Netflix (NFLX) stock driven by subs, not revenue, says Oppenheimer
By Sam Boughedda
Oppenheimer analysts reiterated the firm’s Outperform stance and $365 per share price target on Netflix (NASDAQ:) in a note to clients on Tuesday.
The analysts released the note in response to a recent article from Digiday, indicating the streaming giant was having execution struggles with its new advertising tier.
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“We believe NFLX stock will be driven by subs, not revenue, and data on viewership (80% of Nielsen’s Top Ten) are indicative of in-line or better subs,” they said.
The analysts added that it is “not surprising that ad launch has some hiccups and NFLX does not want to flood ads to meet commitments at expense of engagement.”
“We are less concerned for four reasons: 1) early in launch and not flooding number of ads; 2) if true, $55 CPM is a bullish starting rate; 3) advertisers want to move unspent funds to 1Q; 4) MSFT likely has minimum guarantees, so unlikely NFLX misses ad revenue in short term. NFLX Top Ten data also indicate more hit releases as of Dec. 11 vs. 3Q22. 3P data show NFLX churn remains well below industry average,” they concluded.