First Albany Raises NetFlix Outlook

Analyst Youssef Squali says third-quarter results were outstanding, and says the online video-rental company indicated upward revisions to the 2004 guidance

First Albany raised its estimate and price target on NetFlix (NFLX ).

Analyst Youssef Squali says the online video-rental company posted outstanding third-quarter results. He says non-GAAP earnings per share of 19 cents exceeded both his 12 cents estimate and the consensus 10 cents estimate. He notes NetFlix also upped the fourth-quarter guidance.

Furthermore, Squali says while management didn't issue guidance for 2004, it did indicate that the current First Call earnings per share range of 64 cents to $1.16 (non-GAAP) is too wide, and that $1.10 $1.15 earnings per share is more realistic, implying that the consensus estimate will see upward revisions from the current 88 cents earnings per share over the next few weeks.

Squali raised the 40 cents 2003 earnings per share estimate to 53 cents, and raised the $1.16 2004 estimate to $1.30. He also boosted the $42 target to $47, and maintains his buy rating.

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