Morningstar

Netflix Posts Strong Subscriber Growth; Shares Pricey

We're raising our fair value estimate to $90 per share, but still see shares as expensive amid projections for accelerating free cash flow burn.

Securities In This Article
Netflix Inc
(NFLX)

Netflix reported better-than-expected subscriber growth in both the international (6.36 million net adds versus guidance of 5.05 million) and U.S. segments (2.00 million net adds, versus guidance of 1.25 million). Management once again attributed the net add outperformance to excitement around original content and the continued adoption of streaming video. Netflix continues to expand its streaming base, ending the quarter with more than 110.64 million global paid subscribers, up from 89.09 million a year ago.

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About the Author

Neil Macker, CFA

Senior Equity Analyst
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Neil Macker, CFA, is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers media/entertainment and video game publishers.

Before joining Morningstar in 2014, Macker was a senior equity research associate for FBR & Co., where he covered the telecommunications services sector. Previously, he was an associate equity analyst for R.W. Baird and completed the summer associate rotational program at UBS Investment Bank. Before attending business school, Macker held analytical roles at Corporate Executive Board and Nextel.

Macker holds a bachelor’s degree from Carleton College, where he graduated cum laude, and a master’s degree in business administration from The Wharton School of the University of Pennsylvania. He also holds the Chartered Financial Analyst® designation.

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