Netflix Inc (NASDAQ: NFLX) this week reported higher-than-expected subscriber figures in Latin America, but room for more growth in the Asia-Pacific region, Nomura Instinet said.
Mark Kelley kept a Neutral rating and $330 price target on Netflix.
Netflix issued an 8-K filing that revealed some details on subscribers by global region that hadn't been previously publicly reported as part of a change in how it will now break out its subscriber data.
Overall, the numbers were higher than Kelley had expected in Latin America, but smaller in the Asia Pacific and Europe, Middle East and Africa regions.
Netflix said about 20% of its subscribers are in Latin America, double what was previously expected, and accounting for about 15% of revenue.
"We see this as a positive, as it shows that Netflix has made significant progress in penetrating one of its most mature international markets (Latin America was the first major international expansion in 2011) and a region where English is not the primary language," Kelley wrote in a note.
While Asia and Europe account for fewer subscribers, as a percentage, than thought, it represents a growth opportunity, Kelley said.
Smaller-than-expected penetration particularly indicates potential for growth in India and Southeast Asia, which are attractive because of the large total population.
"The disclosure paints a positive picture of the company’s prospects outside the US (as evidenced by the 9% stock price move since the release)," Kelley wrote.
He remains Neutral, though, because of a belief that competitive pressure in the increasingly crowded streaming market will limit upside for now.
As Kelley noted, Netflix stock has been on a steady climb this week. Shares were up 1.5% to $337.16 at time of publication.
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