Netflix’s stock price is hovering at around $400 a share right now, but it could reach new heights in the next year, according to one analyst.
In a note to investors on Tuesday, GBH Insights analyst Daniel Ives raised his Netflix price target from $400 to $500 a share. He said the decision reflects “stronger than expected subscriber growth for the rest of 2018 and 2019” and continued growth in international markets. Netflix shares are currently trading at $397.75.
Netflix, of course, built its business on a by-mail DVD rental operation. But the company was also one of the first to invest heavily in video streaming and now offers the world’s most popular streaming service. In fact, Netflix’s streaming service is so popular, according to Ives, that the average Netflix user spends more than 10 hours per week on the platform streaming its content. Average users on its closest competing services, Amazon Prime Video and Hulu, spend five hours per week consuming content on those offerings.
All of that and more make Netflix an attractive stock, Ives wrote.
“Our bullish thesis on Netflix is based on our belief that the company’s competitive moat, franchise appeal, ability to increase international streaming customers through 2020, and original content build out will translate into robust profitability and growth,” he told investors.
At $500, Ives is more bullish than other analysts on Netflix and has the highest price target of any of the 40 analysts tracking the company. That said, nearly all of them consider Netflix a strong buy.
