

The article was written by Jacob Saphir, a Financial Analyst at I Know First.

Bullish View of Netflix

Summary:

Positive Revenue Return

Strong Potential International Growth

Consumer Change in Demand

I Know First Algorithm maintains a bullish forecast on NFLX

Background:

Netflix, Inc. (NFLX), is the largest internet television network provider offering online streaming of films, documentaries, television programs, and original programs, such as the hit series Narcos, by Netflix. With its headquarters in Los Gatos, California, Netflix has flourished from a DVD rental-by-mail firm from 1997 to offering viewers in over 190 countries online streaming of television contents commercial free and on demand. Posting earnings per share exceeding expectations for the past 3 quarters, investors are anxiously awaiting Netflix's upcoming third quarter 2016 report as early as October 12, 2016. We maintain a bullish forecast for Netflix for the following reasons: revenue growth, potential growth internationally, and favorable consumer change in demand.

Positive Revenue Return:

Netflix has been consistently achieving revenue growth for the past ten years. Since the company's fourth quarter release in December 31, 2015 to its most recent release six months later, revenue has increased from $1,823.33 million to $2,015.2 million, a 15% increase from the start of the year. Its sales revenue has increased from last year's second quarter of 10.16% in 2015 to 28% in the second quarter for 2016. Net income between the same time period also soared from $26.34 million to $40.76 million, a 54% increase. Despite having a higher leverage ratio and accumulating more debt by issuing long term notes in order to fund the company's ambitious growth into expanding the international market, Netflix continues to remain profitable and has the potential to continue its positive trend.