Netflix, Inc. (NASDAQ:NFLX) is gearing up for the earnings season with the Street remaining bullish that it will beat estimates as growth on the international front continues to gain traction. During an interview on CNBC, Baker Avenue Asset Management analyst, King Lip, reiterated that Netflix’s international business has some room to grow as Europe and Canada continue to offer favorable synergies for growth.
Content creation is another frontier that makes Netflix worth pursuing according the analyst as this is expected to shield it from having to pay way off the top in acquiring content from other content creators. The content business continues to grow, Netflix, Inc. (NASDAQ:NFLX) having served 10 billion hours of content during the quarter.
“There are Netflix produced shows like Orange is the New Black, there is a Dare Devil show now coming out all of those have done very well, and House of Cards as well is a hit show. Not only are they a content delivery but they are also content creators as well,” said Mr. Lip.
Choosing to expand, first to English speaking countries according to Lip was a great move as most of these countries have almost the same cultural traits as the US, which should guarantee growth in the long run.
Netflix, Inc. (NASDAQ:NFLX) subscription base can only continue to grow based on the ongoing push to expand internationally having already debuted in Australia and New Zealand. International expansion translates to an increase in the average streaming base which should translate to more revenues.
The analyst believes there is value to be unlocked from the stock considering all the good things going well for the company.
“I think if you are a short-term shareholder I think there is probably a better chance to buy Netflix, Inc. (NASDAQ:NFLX), it actually had quite a bit of a run here over the last couple of days. So I won’t be surprised of buying ahead of the earnings report and as we see you buy the rumor, and you sell the news,” said Mr. Lip
The analyst expects Netflix, Inc. (NASDAQ:NFLX) to continue with its impressive rally even on missing earnings.
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