He also noted he expects Netflix “will remain cash flow negative for several years” as it continues to invest in original content. “The burn rate has been a focus,” he said. “It is also increasingly likely that this year or 2019 could mark the peak of [free cash flow] losses.”
Free cash flow was negative $287 million for the quarter.
Janedis hiked his price target on the Netflix shares to $312 a share from $236, implying a 1.4 percent upside from Monday’s closing price.
Barton Crockett, an analyst at B. Riley FBR, said Tuesday that while the company’s results were robust, “we still struggle with high valuation and lofty expectations.” Netflix stock traded at a price-to-earnings ratio of 219 on Tuesday, one of the highest among S&P 500 companies, according to FactSet.
Crockett also raised his price target on Netflix to $313 from $243, implying a nearly 2 percent upside from Monday’s close.
“While we can’t responsibly recommend chasing Netflix’s equity here, we don’t see how one can escape seeing Netflix’s surprisingly durable growth as cautionary” for traditional TV, Crockett said in a note Tuesday.