Oppenheimer analysts reiterated their Outperform rating and $365 price target on Netflix, Inc. (NASDAQ:NFLX) in response to Digiday’s article, according to which Netflix lets advertisers take their money back after missing viewership targets.
The analysts believe the company’s stock will be driven by subs, not revenue, and data on viewership (80% of Nielsen’s Top Ten) are indicative of in-line or better subs.
The analysts are less concerned for four reasons: (1) early in the launch and not flooding a number of ads, (2) if true, $55 CPM is a bullish starting rate, (3) advertisers want to move unspent funds to Q1, (4) Microsoft likely has minimum guarantees, so unlikely Netflix miss ad revenue in short term.