As Netflix shares soar, Wall Street remains nearly divided between those who think the streaming service is a "buy" and those who rate it a "hold" or "sell"
Following the company's blockbuster earnings report on Monday, analysts largely hiked their price targets as the stock spiked after the report. Netflix's earnings and revenue both topped expectations while total net adds topped estimates.
Still, analysts remain divided over what happens for the company from here. Here are some highlights from analysts' initial takes in the wake of the report:
Calling Netflix "overvalued," Wedbush said the company's "cash burn is unacceptably high."
"In our view, Netflix's current share price fails to address the potential for meaningful competition from Amazon, which recently launched a video-only subscription option of its own, and although we acknowledge that Netflix has the much more powerful brand for (streaming video on demand), we are confident that with its new standalone service, Amazon declared war on Netflix," analysts said.
Expect the conversation about Netflix to change, JPMorgan Chase analysts forecast, from un-grandfathering as its price changes continue rolling out. The firm said Netflix's original series are working well while its operating margin exceeded JPMorgan's expectations.
Looking forward to 2017, JPMorgan expects a "cleaner story" due to pricing changes that will take hold, stronger content and bigger profits.
"We believe NFLX is on track toward 60M+ US subs & ~100M Int'l subs by 2020, w/material earnings power," they wrote, reiterating an "overweight" rating.
SunTrust analysts kept their "hold" rating on the stock, citing lower free cash flow from higher investment in original content, intensifying competition for screen time and a premium valuation.
The bank acknowledged its "sell" call just a week ago "was wrong in the short term." While it reiterated its rating, analysts hiked their price target on the stock to $92 on higher estimates.
It called estimates for Netflix's medium-long term profit growth "too high."