Netflix Subscriber Growth Could Lift Stock by 20%
Higher-than-expected Netflix subscriber growth could boost the company’s stock (NASDAQ:NFLX) by close to 20%, according to Trefis member forecasts.
Trefis members have created forecasts for Netflix’s total number of subscribers, a key driver of the company’s stock price. The member forecasts suggest that the driver will trend above the estimates of the in-house team of analysts at Trefis.
Netflix competes with Comcast (NASDAQ:CMCSA), Dish Network (NASDAQ:DISH), DirecTV (NASDAQ:DTV), and Time Warner Cable (NYSE:TWC) in the pay-TV market. We currently have a Trefis price estimate of around $85 for Netflix’s stock, about 34% below the current market price of $129. Netflix’s stock is quite sensitive to fluctuations in its subscriber count. Below is a chart showing recent estimates created by Trefis members for this driver in detail.
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The average of Trefis member forecasts for Netflix Subscribers indicate an increase from around 21 million in 2010 to 47 million by 2016, compared to the baseline Trefis estimate of an increase from 18 million in 2010 to around 39 million by the end of the Trefis forecast period. The member estimates imply an upside of 19% to the Trefis price estimate for Netflix’s stock. In the past, Netflix’s total subscriber count grew from 1.5 million in 2003 to around 12 million in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Netflix’s stock to Netflix Subscribers.