Netflix 5 Years From Being $100 Billion Company; Stifel Nicolaus

By Trey WilliamsMarketWatch Pulse

Analysts at Stifel Nicolaus on Friday said that Netflix Inc. could become a $100 billion company by market cap by 2020. Analyst Scott Devitt wrote in a note that he expects Netflix's operating income to reach $3.8 billion by the end of 2020, assuming paid subscriptions hit 150 million at an average $9 in revenue per customer and a 23% operating margin. For Devitt's bullish case of reaching $100 billion in market cap, however, he expects the company would have to have a subscription price of $10 per user and 30% operating margins. This would generate roughly $5.4 billion in operating revenue, making Netflix a nearly $1,600 stock ($230 post-split), according to Devitt. Devitt said that if Netflix's operating leverage continues to benefit from global licensing deals and the completion of its international expansion, that this scenario is achievable.

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