The Zacks Analyst Blog Highlights: Netflix, Roku, Discovery, SINA And IHeartMedia
Zacks Investment Research | Oct 20, 2019 10:45PM ET
For Immediate Release
Chicago, IL –October 21, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Netflix, Inc. (NASDAQ:NFLX) , Roku, Inc. (NASDAQ:ROKU) , Discovery, Inc. (NASDAQ:DISCA) , SINA Corporation (NASDAQ:SINA) and iHeartMedia, Inc. (NASDAQ:IHRT) .
Here are highlights from Friday’s Analyst Blog:
Netflix Is Pricey: Buy These Cheaper Media Stocks Instead
Netflix, Inc.notched a fascinating third quarter that no one saw coming. This has encouraged firms to jack up their price targets for Netflix. This steers away small investors who can’t afford large stakes in such companies. Thus, if you have a taste for media stocks and don’t want to burn a hole in your pocket, there are companies trading cheap with solid growth potential.
Impressive Q3 for Netflix
Shares of Netflix jumped 7.1% on Oct 17, courtesy of a stellar earnings beat in the third quarter. The company reported earnings of $1.47 per share that surpassed the Zacks Consensus Estimate by 42 cents and was better than management’s guidance of $1.04. Moreover, earnings jumped a stellar 65.2% on a year-over-year basis.
Though this Los Gatos, CA-based company’s revenues of $5.25 billion have missed the Zacks Consensus Estimate, the metric is up 31% from year-ago levels. What’s more, excluding a negative impact of $137 million related to unfavorable foreign exchange, consolidated revenues grew 35% year over year.
To top it, the streaming giant announced net additions of 6.77 new subscribers in the third quarter. This is indeed a welcome change compared to the second quarter when Netflix had added only 2.7 million, much below the forecasted 5 million. Lest we forget, Netflix is still a leading provider of video streaming content. After all, it has nearly 60.1 million domestic subscribers and 91.5 million international members.
Price Goals Increase for Netflix
The streaming giant’s grand third-quarter show came just in time. Analysts who were lowering their price targets and downgrading the stock post its dismal second quarter, have now adopted a different stance.
Almost 35 analysts are currently offering a 12-month price forecast for Netflix to around a median range of $400, with a high estimate of $451 and a low estimate of $188. But, if we focus on the median target range, it represents a more than 35% increase from Netflix’s last closing price of $293.35.
All these imply that Netflix is a pricey pick for now. Lest we forget, Netflix is already prohibitively expensive in the market with a P/E of 88.57, which is way ahead of the industry average of 4.3 (read more: Zacks Investment Research
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