Streaming giant Netflix (NFLX) has quietly cancelled its offer of free trials in the US.
Now the website tells potential customers: “Free trials are not available, but you can still sign up and take advantage of all Netflix has to offer.”
It continues: “There are no contracts, no cancellation fees, and no commitments. You have the freedom to change your plan or cancel online at any time if you decide Netflix isn’t for you.”
Reporting on the news, a Netflix spokesperson told The Verge: “We’re looking at different marketing promotions in the U.S. to attract new members.”
Shares in Netflix rose 2.65% in Tuesday’s trading, with the stock now up over 70% year-to-date. Due to this explosive rally, the Street has a cautiously optimistic Moderate Buy consensus on NFLX stock. That’s with 20 recent buy ratings, vs 7 holds and 5 sells.
Meanwhile the average analyst price target of $530 indicates shares could pull back over 4% from current levels.
Speaking from the sidelines, Stifel Nicolaus analyst Scott Devitt recently reiterated his hold rating (citing valuation), but ramped up his price target from $500 to $520.
“Several near-term concerns including a more modest guide, controversial content, and uninspiring app engagement readouts have likely put a tighter band on expectations heading into 3Q results” he explained.
However, he expects many of the factors benefiting Netflix over the past several quarters to continue into 3Q. These include a dearth of events and fewer out-of-home entertainment options, less compelling linear programming, and general domestication.
“We think these macro factors will lead to a solid subscriber outcome for 3Q” Devitt concludes, modelling +4.1mm global paid net adds in 3Q, ahead of consensus of +2.5mm. (See NFLX stock analysis on TipRanks)
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