Video streaming giant Netflix, Inc. (NASDAQ: NFLX) is testing a feature that allows users to share accounts outside their households for an extra charge, according to a report published by Reuters.
The California-based company is also testing another feature that enables its premium, standard, and basic plan members to transfer their profile information, along with data like personalized recommendations and viewing history, to a sub or new account.
At present, only people living in the same house can share their Netflix account. The company said that this has created confusion about how and when accounts can be shared.
The testing of the features is being carried out in Peru, Chile and Costa Rica, and allows premium and standard members to add a maximum of two people.
What if the Tests are Successful?
If the tests prove to be successful, then Netflix plans to roll out the features across the world. This will boost the company’s revenue and allow it to invest in new content.
NFLX stock closed over 4% higher on Wednesday. However, it opened in red and was trading almost 1% down during the pre-market session on Thursday at the time of writing.
Analysts’ Take
Recently, MoffettNathanson analyst Michael Nathanson maintained a Hold rating on the stock and lowered the price target to $350 from $375 (2.1% downside potential).
Nathanson said, “Netflix has tapped about half of its total potential broadband-based subscribers, but it is barely scratching the surface of the world’s lower revenue-per-user (RPU) mobile subscribers.”
“The biggest growth opportunities are coming from less developed nations and Netflix may need to bring RPUs down in just about every non-mature market if it hopes to yield continued significant subscriber growth,” he added.
Overall, the stock has a Moderate Buy consensus rating based on 18 Buys, 15 Holds and two Sells. The average NFLX price target of $511.59 implies 43.1% upside potential. Shares have lost 40.2% year-to-date.
Website Traffic
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insight into Netflix’s performance.
According to the tool, compared to the previous year, Netflix’s website traffic registered an 18.3% fall in global visits in February. Moreover, website traffic has declined 33.2% year-to-date against the same period last year.
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