Driven by enormous opportunities in the international markets,
According to Stifel analyst Scott Devitt, the number of subscribers worldwide is expected to almost double by 2025.
Devitt, who has a buy rating and target price of $ 400 for Netflix shares (NFLX), believes the company has a position in both the EMEA region (Europe, Middle East and Africa) and the Asia-Pacific region can expand dramatically. While streaming video service achieved 55% market penetration in the U.S. and Canada and 39% in Latin America, Netflix achieved only 19% market penetration in EMEA and 11% in the Asia Pacific region.
The analyst notes that Netflix invests heavily in non-English content and publishes around 300 such titles in 2019 alone. He adds that since 2017, the company has published 340 original non-English titles in EMEA languages, 195 in Asia Pacific and 191 in Latin American. Overall, he estimates that Netflix launched the original program in 29 different non-English languages in 2019. The largest share, around 27%, was in Spanish-language content.
According to Devitt, Latin America, EMEA and the Asia-Pacific region will together be a target market of more than 600 million households by 2025. At this point, Netflix can reach penetration rates of 62% in the US and Canada and 41% in EMEA, 53% in Latin America and 25% in the Asia-Pacific region. He estimates that Netflix has closed 2019 with a total of 166 million subscribers, and sees that number will almost double to 313 million by 2025.
Devitt adds that he believes the company will break even in 2022 and will leverage content spending significantly from there.
Netflix stock recently rose 1% to $ 341.99.
Write to Eric Savitz at email@example.com