Wedbush Remains Bullish on Netflix (NFLX) Despite Short-Term Margin Setback

Core Viewpoint - Netflix Inc. is viewed as a strong investment opportunity despite recent disappointing Q3 results and lowered price target by Wedbush Securities analyst Alicia Reese [1][2][3] Financial Performance - Netflix reported unexpected expenses of $619 million related to Brazilian tax disputes, impacting Q3 operating margin by 5% [3] - The tax issue resulted in over 300 basis points impact to operating margin for the quarter, but future annual impact is expected to be only about 20 basis points [3] Market Position and Growth Potential - Despite the recent softer Q3 results, Netflix's subscriber base continues to grow, and its offerings remain attractive even with price increases [2] - The company is well-positioned to benefit from global advertising growth, which is a key aspect of the investment case [2] Analyst Sentiment - Alicia Reese maintains an Outperform rating on Netflix, although she lowered her price target from $1,500 to $1,400 following the Q3 results [1][2] - The market's reaction to Netflix's Q4 guidance was underwhelming, contributing to a decline in stock price [3]