Baird Expects A Strong Q1 At Netflix

Netflix, Inc. (NASDAQ: NFLX) is scheduled to report its first quarter financial results on April 15. In a report published Wednesday, Baird analysts William V. Power and Steven J. Beckert provided a preview of the earnings call.

According to the note, the firm's latest consumer survey suggests strong growth in the U.S. for the first quarter. They also suspect "House of Cards'" third season, along with positive reactions to "Unbreakable Kimmy Schmidt" and "Bloodline" were key drivers.

Based on these factors, Baird remains positive on the 2015 and longer-term outlook and reiterated an Outperform rating, accompanied by a $505 price target.

The Survey

According to Baird's subscriber survey, sample penetration in the U.S. for the first quarter reached 43 percent. This implies a substantial increase from the previous quarter's 35 percent, and the 31 percent penetration from one year ago. The firm is now forecasting 2.1 million paid net additions in the first quarter, which they believe may be a conservative estimate – especially when compared to the 2.7 million additions a year ago.

The analysts also expect solid international results, driven by recent new market launches and forecast first international paid net additions of 2.4 million – versus 2.0 million a year ago.

Overall, the analysts forecast first quarter consolidated revenue and EPS of $1.57 billion and $0.63, versus consensus of $1.57 billion and $0.64.