'An unprecedented miss': Here's what Wall Street is saying about Netflix's disappointing quarter

Price Target: $420

Rating: Buy

"As Netflix's content investments, distribution partnerships and marketing spend drive subscriber growth significantly above consensus expectations and the company approaches an inflection point in cash profitability, we continue to believe shares of NFLX will significantly outperform." A team of analysts led by Health Terry said in a note to clients on Thursday.

Price target: $450

Rating: Overweight

"First, in the last three years, Netflix has missed its quarterly net additions once a year, so 2Q 19 may prove to be 2019's only miss. In all three of these cases it has outperformed meaningfully the following quarter," Benjamin Swinburne, an analyst at Morgan Stanley said in a note to clients on Thursday.

He added: "We expect continued strong ARPU growth, see continued leverage of content spend and marketing in 2020."

Price: $420

Rating: Buy

"Netflix missed 2Q19 consensus revenue and subscriber estimates due to pricing and content timing," analyst Michael Morris said in a report on Thursday.

He continued: "Netflix continues to refine the breadth and quality of its content by: 1) creating award-winning (117 Emmys in 2019) content that carries both local and cross-border appeal and 2) showcasing transparency and magnitude (The Perfect Date and Always Be My Maybe watched by 48mm and 32mm households, respectively, in first four weeks) of its viewership metrics to attract quality production talent and entice new customers."

Price target: $330

Rating: Neutral

"Our two concerns that this dip may not be like the old times are: (1) this is an unprecedented miss and (2) competition is on the horizon. Following the miss in 2Q, we are lowering our revenue, subscriber, and medium term FCF estimates," Mark Zgutowicz said in a research note to clients on Thursday.

"NFLX maintained its guidance for subscriber adds to grow in '19E over '18. We are below this guide because of the unparalleled competition Netflix will face globally when Disney+ launches in November and we believe will cause some near-term disruption."

Price target: $188

Rating: Underperform

"We expect content spending to trigger substantial cash burn for many years; notwithstanding four Netflix price increases in the last five years, cash burn continues to grow," Michael Pachter, an analyst at Wedbush, said in a report on Thursday. "Content migration and price hikes could cause a deceleration in subscriber growth, and consistently negative FCF makes DCF valuation impossible."

He continued: "Netflix has already penetrated the majority of its above median income household addressable market at 60 million subscribers, and with competition from Disney +, HBO Max and Comcast, we expect the company to have difficulty meaningfully growing its domestic subscriber base."