Netflix Stock Forecast: COVID-19 Is Helping NFLX Ascent To $400

motek 1This Netflix stock forecast article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.


  • Statista already projected that the new coronavirus pandemic, COVID-19 can boost subscriber growth of Netflix by as much as 30%.
  • Aside from playing video games, watching streaming video is currently the best entertainment for billions of quarantined people.
  • The cheap $3 mobile-only plans for Asian customers will likely help Netflix achieve 200 million subscribers before 2020 ends.
  • Robust subscriber growth will help Netflix maintain its momentum and help improve its future profitability.
  • The stock picking AI of I Know First has a super bullish one-year market trend forecast score for NFLX, $658.05.

The mandatory stay-home edicts of many countries due to COVID-19 is a big boost to Netflix (NFLX). As the world’s no. 1 paid streaming video company, Netflix is emerging as a top beneficiary of the coronavirus pandemic. As more countries enforced lockdowns, the more people will use (or become news subscribers of) Netflix. The 51% increase in Netflix time spent worldwide will boost the Q1 and Q2 revenue numbers of Netflix.

(Source: Statista)

Greater consumption of Netflix content can lead to the first quarters of 2020 delivering higher than Q4 2019’s $5.467 billion. Again, the potential increase in quarterly revenue should also lead to higher net income. More institutional investors will go long NFLX if this company starts posting over $700 million in quarterly net income.   

Statista already projected that Netflix’s subscriber growth could go as high as 30% thanks to COVID-19. You should buy more NFLX shares because it has a great chance to rise to $400. A 30% boost in subscribers could lead to 200 million paying customers for Netflix.

Netflix already has more than 167 million subscribers. Thanks to more governments forcing their citizens to stay at home, Netflix will probably end 2020 with around 200 million subscribers. This estimate is feasible. Let us not forget that Netflix has been aggressive in pricing its service to gain international subscribers. Here in the Philippines, Netflix remains no. 1 because of its 149 pesos (or less than $3) monthly fee for mobile-only subscription. You can still connect your phone or tablet via HDMI to a big-screen TV while subscribed to this 149 pesos/month mobile plan.

More Subscribers Is Key To Stronger Bottomline

Increase subscriber growth not only helps Netflix’s topline. It also leads to long-term profitability. Only consistent profitability can ultimately justify the high valuation ratios of NLFX. Don’t get me wrong, I appreciate that NFLX is now getting more affordable. Its historical P/E valuation ratio has dipped from over 300x to just 80x. However, an 80x P/E ratio is still lofty valuation for a low-margin business like Netflix.

(Source: Stock Analysis On Net)

It is very basic that a higher EPS is the easy path to higher P/E valuation. Higher EPS can help NFLX hit $400 pretty soon.

Subscriber Growth Plus More Efficient Original Content Production

Like it or not, I disagree with Seeking Alpha’s A- profitability grade for Netflix. I will only consider this company as a highly profitable unit when it can deliver higher than 15% in net income margin. I understand that the massive $17 billion annual budget for original content is why Netflix still has less than 10% net income margin. However, several years of producing original content should have taught Netflix to be more efficient in controlling production overhead expenses.

Going forward, sustained subscriber growth will not be enough to justify NFLX’s high valuation. Cost control over its huge annual budget for original content is the key to improving Netflix’s profitability. We love Netflix as a long-term investment but there must be a limit to its spending spree on original content. Netflix’s continuing negative free cash flow performance has to stop soon. Doing so might even attract the interest of Warren Buffett. Mr. Buffett will never invest in a company that has a negative $3.14 billion in annual free cash flow.

Netflix Stock Forecast


NFLX is a strong buy because it benefits from pandemic events. Unless Disney (AAPL) or Apple (AAPL), can match Netflix’s $3/month subscription offer, they will lose the international market. Netflix is generating more than $20 billion annually. Netflix is spending a lot on producing original content. However, it generates enough recurring sales from more than 167 million subscribers. Going forward, I expect Netflix to become a more cost-efficient producer of TV shows and movies.

My bullish endorsement of NFLX is in line with its very high one-year market trend forecast score from I Know First. The stock-picking AI of I Know First apparently agrees with my assessment that Netflix is one of the top resilient stocks to own during pandemics.

Netflix Stock Forecast

How to interpret this diagram

Past Success With Netflix Stock Forecast

I Know First has been bullish on NFLX’s shares in past stock market predictions. On October 6, 2019, the I Know First algorithm issued a bullish forecast for Netflix stock price. This algorithmic trading tool successfully forecasted the movement of the NFLX. From this date to now, Netflix stock price has risen by 30.37% in line with the I Know First algorithm’s forecast. See the chart below.

Netflix Stock Forecast
Netflix Stock Forecast

This bullish Netflix stock forecast was sent to the current I Know First subscribers on October 6, 2019.

Here at I Know First, one of the top fintech companies in the industry, our algorithm has modeled and predicted assets price movement worldwide for short-term and long-term time horizons, ranging from 3 days to a year. Since 2011, we have been providing daily forecasts, forex predictionsgold price predictions, top stocks to buy predictions, quant trading forecasts and, in particular, Apple stock forecast. Today, we are producing daily forecasts for over 10,500 assets. Our predictive tool is used by institutional clients, as well as private investors and traders to identify the best investment opportunities in the market.

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Please note-for trading decisions use the most recent forecast.