Analyst Believes Netflix Could Pass U.S. Subscriber Growth Expectations

According to one analyst, Netflix could beat U.S. subscriber grow expectations in the second quarter.

Piper Jaffray analyst Michael Olsen, who has an “overweight” rating on the stock and a $440 price target, has said that according to the firm’s analysis of Google search trends, there is an uptick of domestic subscribers of 11.7% from the previous year, higher than Netflix’s guidance of 8.2%

“Our analysis of Netflix search trends points to a strong Q2 for domestic subs, with international essentially in-line,” Olson said in a note to investors.

For international subscribers, Olson said the firm’s search index suggests 45.8% growth, versus guidance of 36.5%.
According to the analyst, the search index has historically overstated actual results by an average of 100 basis points over the past four quarters.

“We would not directly apply the index’s implied growth rates and it is important to take note of historical error in our model, but the index is directionally positive for domestic and relatively in-line for international through two months of Q2,” he wrote.

Netflix is scheduled to report second-quarter results after the market closes on July 17th. Wall Street is waiting for earnings of 56 cents a share and revenue of $4.93 billion according to Bloomberg-compiled estimates.

Disclaimer: We have no position in Netflix, Inc. (NASDAQ: NFLX) and have not been compensated for this article.