Internet television network Netflix (NFLX) could reach 90 million U.S. subscribers in 10 years or less, a Wall Street research firm said Tuesday.
XBernstein made the prediction after surveying 1,000 U.S. internet users last month. Netflix executives have said the service could reach 60 million to 90 million subscribers in the U.S., so the Bernstein forecast is at the top of the company's target range. The streaming video leader currently has 57 million U.S. subscribers.
A target of 90 million subscribers is likely to strike many investors as "very hard to believe," Bernstein analyst Todd Juenger admitted in a report. He noted that conventional pay TV in the U.S. peaked at about 100 million subscribers.
"We believe Netflix is a superior product for entertainment programming in almost every way, compared to conventional TV, so why not?" Juenger said.
His current forecast has Netflix reaching 87 million U.S. subscribers in 2030. The survey results gave him the confidence to believe Netflix can achieve or exceed that forecast sooner than 2030, he said.
Young People Like Netflix
Netflix viewership skews young, so as more consumers come of age they'll be subscribing to the service, Juenger said. Netflix also has a sizable pool of nonsubscribers to which it can pitch, he said.
Juenger reiterated his outperform rating on Netflix stock with a price target of 372.
Netflix stock suffered its worst drop in nearly two years on Monday, as the broader market fell on U.S.-China trade conflicts.
Netflix shares rose 3.9% to 399.39 on the stock market today.
Elsewhere, Imperial Capital initiated coverage of Netflix with an outperform rating and Street-high price target of 503. Netflix stock hit an all-time high of 423.21 last Thursday before the market turned south.
8% Of Netflix Users Are 'Leeches'
Bernstein estimates that Netflix has 141 million users in the U.S. That factors in family members and roommates sharing accounts.
Survey results indicate that 70% of Netflix users pay for the service. The rest enjoy the service while someone else pays for it, usually family members in the same household.
The Bernstein survey showed that 8% of Netflix users are "leeching off a friend or stranger."
Netflix has an advantage over other streaming services because it is firmly rooted in popular culture, Juenger said.
"The expression isn't 'Amazon and chill' or 'CBS and chill' or 'MTV and chill.' It's 'Netflix and chill,'" he said.
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