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Thomas Weisel reiterated its outperform rating on NetFlix (NFLX
Analyst Gordon Hodge says 1.147 million subscribers at the end of the second quarter (June) is in line with his 1.149 million estimate. He notes paying subscribers comprised 96% of ending subscribers, and national penetration of 1% rose from 0.9% in the first quarter, and 0.6% in the second quarter of 2002.
Hodge notes that in the San Fransisco Bay area, TV household penetration rose to 5%, from 4.6% in the first quarter and 3.2% in the second quarter of 2002. He based his outperform rating on an expected 50% increase annually in EBITDA and earnings per share over the next three to five years.
Hodge remains comfortable with estimates for 15 cents second-quarter earnings per share, $14.4 million EBITDA, and $64 million in revenues. He sees 30 cents 2003 earnings per share, $50 million EBITDA, and $263 million in revenues. He has a $30 12-month target.