The 'House Of Cards' Season 5 Debut May Be A Reason To Own Netflix Shares

With the highly-anticipated fifth season of the hit Netflix, Inc. (NASDAQ: NFLX) show “House of Cards” just a week away, the next two weeks could be a critical period for Netflix traders.

Is 'House Of Cards' A Full Deck?

“House of Cards” will likely give Netflix shares a bit of a bump, according to Loop Capital analyst David Miller.

“Recall the effects of Season #4 on the stock price—after becoming available for streaming on Feb. 14, 2016, NFLX ended up handily beating consensus views on subscribers, with domestic subs for that quarter coming in at 2.23 million (consensus at the time was 1.77 million), and International subs coming in at 4.51 million (consensus at the time was 4.38 million),” Miller said.

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Loop predicts the same pattern of “House of Cards”-driven subscriber beats will play out for Netflix in 2017.

The Significance Of Subscribers

The primary catalyst for Netflix stock in recent years has been subscriber count, and Miller said the company could do itself a favor in terms of meeting its subscriber count guidance if it chose to report earnings numbers later into each quarter.

“House of Cards” typically premiers in Q1 for Netflix, but this year’s release was delayed for two key reasons. First, leading actor Kevin Spacey and head writer Beau Willimon had previously-scheduled outside commitments. Second, Netflix likely didn’t want ‘House of Cards’ to cannibalize its other expensive original content that debuted in Q1, including ‘A Series of Unfortunate Events,’ ‘Santa Clara Diet,’ ‘Ultimate Beastmaster’ and ‘Marvel’s Iron Fist.”

Despite Netflix’s impressive 27.1-percent gain so far in 2017, Miller said investors can expect more upside ahead from the stock in the coming year. Loop maintains a Buy rating for Netflix and has raised its price target for the stock from $172 to $180.
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