Analyst Safa Rashtchy says Netflix reported 1.29 million total subscribers, which was better than expected and slightly ahead of the video-rental company's guidance range. He says based on the new subscriber count, Netflix's revenue estimate of $68.9 million could increase by $700,000 to $1 million.
Rashtchy thinks Netflix's nationwide, household penetration long-term goal of $1 billion in revenue and $100 million to $200 million cash flow is achievable in the next four to six years. Although he's impressed with Netflix's ability to achieve the top-end subscriber guidance range, he believes the most compelling aspect of the business is its operating leverage.
Rashtchy thinks Netflix's stock warrants a premium to the e-commerce comp group average, and raised his price target to $39.