Netflix Stock Will Extend Gains after Second Quarter Results, Goldman Sachs Claim

Netflix stock price rallied more than 60% this year as staying at home policies and lockdowns have helped it in expanding its subscriber base in the past few months. Despite the recent rally, some market analysts are seeing more gains for the online streaming company.

Goldman Sachs has provided a price target of $670 on Netflix stock, representing almost 30% upside from the current level.

Netflix stock is currently trading around $520, up 40% in the past twelve months. Its shares have recently hit an all-time high of $575. Goldman expects Netflix to report an additional 12.5 million subscribers for the second quarter.

“It fails to capture the reality of Netflix’s earlier stage markets and a dramatically changing world that is pushing changes into every corner of consumer behavior,” maintains GS.

The firm also expects a huge growth in its free cash flows for the second quarter. This is because of lower investments in movies and series production.

The market consensus shows that Netflix could report 7.5 million international subscribers during the second quarter.

The analysts’ consensus estimate for second-quarter earnings per share stands around $1.83, representing a growth of 205% from the past year period. The revenue is likely to hit $6.08bn for the second quarter according to the consensus estimate. Netflix has topped earnings per share estimate 75% of the time in the past two years.

On the other hand, some analysts turned bearish on the stock following the massive rally in the past three months.

For instance, UBS has slashed Netflix stock price target to $525 from the previous target of $535 as the firm expects Netflix to face more difficult subscriber growth in the following quarters. The firm is showing concerns over sustained growth and margin expansion. However, UBS also expects strong results for the second quarter.