Financial analysts have just revealed why Netflix stock is a hot commodity at the moment, and you need to find out why.
Neil Doshi of Mizuho Securities wrote in a report that Netflix is going to see considerable growth in the coming year.
"We believe there is material room for international subscriber growth and contribution profit growth, even without material gains in Asian markets," Doshi wrote according to CNBC. "Furthermore, we like the moats around original content, and as cord-cutting increases, we see NFLX as a beneficiary. We like the setup for 2017 and beyond."
Not only is Netflix stock likely going to surge in 2017, but the company's stocks recently reached an all-time high this past year.
Netflix has been riding on the success of their initiative to produce more original content than ever. Shows like Orange is the New Black, House of Cards, and the summer breakout series Stranger Things have all been huge drivers to build the subscriber base.
Most recently, Netflix's original series The Crown racked up awards at the Golden Globes. The series won awards for best TV series drama, and the star, Claire Foy, won a Golden Globe for best performance by an actress in a TV series drama for her portrayal of a young Queen Elizabeth II. Most importantly, audiences, critics, and financial analysts alike are loving the streaming service's original material.
William Blair analyst Ralph Schackart echoed Neil Doshi's sentiment claiming that Netflix stock is only going to keep soaring.
"We believe that Netflix has a meaningful leg up on original programming within the over-the-top (OTT) streaming environment and suggest that these advantages might be underappreciated by investors," Schackart wrote in a report. "Moreover, contrary to some, we believe OTT streaming still has plenty of room to grow both domestically and internationally, and Netflix is well positioned to benefit from this secular growth."
While a slew of financial analysts have thrown an overwhelming amount of support into purchasing Netflix stock, there are those who feel differently.
Michael Pachter, an analyst with Wedbush Securities, is of the opinion that Netflix's stock is bearish.
"We continue to believe that Netflix is overvalued," Pachter wrote in a report. "Netflix continues to burn cash to fund its acquisition of original and exclusive content, while international profitability remains elusive and competition for both content and subscribers is becoming more fierce. Cash burn is accelerating, and we remain skeptical that the company's content library justifies its high level of spending."
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