A smaller decline in Netflix’s (NASDAQ:NFLX) average subscription fee paid per subscriber could result in a potential upside of 14% for Netflix’s stock. Netflix competes with Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC), Dish Network (NASDAQ:DISH) and DirecTV (NASDAQ:DTV) in the pay-TV market. We currently have a Trefis price estimate of $85 for Netflix’s stock, about 33% below the current market price of $126.
Over the last week, Trefis members have created forecasts for the key driver Netflix Monthly Subscription Fee and their forecasts suggest that Netflix’s Monthly Subscription Fee will trend above the estimates of the in-house team of analysts at Trefis.
Netflix’s stock is quite sensitive to Monthly Netflix Subscription Fee. Below is the chart showing recent estimates created by Trefis members for the one driver in detail.
1. Monthly Netflix Subscription Fee
The average of Trefis member forecasts for Monthly Netflix Subscription Fee indicate a decrease from around $12 per month in 2010 to $11.50 per month by 2016, compared to the baseline Trefis estimate of a decrease from $11.80 per month in 2010 to $10.50 per month by the end of the Trefis forecast period. The member estimates imply an upside of 14% to the Trefis price estimate for Netflix’s stock. In the past, Monthly Netflix Subscription Fee has decreased from $17 per month in 2004 to around $13 per month 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 Monthly Netflix Subscription Fee.
