Cantor Fitzgerald analyst Youssef Squali on Wednesday raised his earnings estimates and price target on Netflix Inc., citing its strong growth.
THE OPINION: Netflix, based Los Gatos, Calif., provides subscription-based access to movies and televisions shows through its online and mail delivery services.
The analyst said that Netflix's first-quarter results were ahead on virtually every metric, proving its popularity as a service and the strength of its business model. With its expanding selection, line-up of exclusive content and improving personalization, Squali believes Netflix holds a unique position to benefit disproportionately from the rise of Internet television.
Netflix has made a number of notable gains recently, including the popularity of shows exclusively available to its members such as "House of Cards" or the special season of "Arrested Development". DreamWorks Animation announced Tuesday that it would provide original television shows to Netflix. And Netflix said Wednesday that it will expand into the Netherlands later this year.
Squali, who has a "Buy" rating on the stock, raised his price target to $230 from $180. The analyst also upgraded his 2013 earnings estimates for the company. He now expects the company to earn $1.99 per share on revenue of $4.35 billion, up from his prior forecast of $1.91 per share on revenue of $4.28 billion.
That is ahead of broader market expectations. Analysts polled by FactSet, on average, are anticipating earnings of $1.48 per share for the year on revenue of $4.33 billion. The analysts' earnings-per-share estimates range between 81 cents and $2.14.
THE STOCK: Netflix shares gained $5.64, or more than 2 percent, to $234.47 by midday Wednesday. Its stock value has more than doubled since this time last year.