Baird remains positive on the global growth opportunity, but views valuation as fair in light of increasing competition, rising content costs and steep free cash flow losses, which the company expects to continue.
The prediction comes as the service made public it's Q1 2017 results, reporting an added 1.42 million subscribers in the USA, with an additional 3.53 million in the rest of the world.
Around 51 million of Netflix's users are from the U.S. By the end of 2017, Piper Jaffray analyst Michael Olson anticipates the bulk of the company's subscribers to be from outside the nation.
A costly global expansion has depressed Netflix's profits.
The much-publicised moved to "thumbs-up thumbs-down" feedback has resulted in twice as many ratings.
The company pushed back the next season of its defining hit, 'House of Cards, ' and other programming to the second quarter, which should boost the number of new subscribers in that period, Netflixsaid. If that unbelievable milestone is true, then Netflix executives just tipped their hand that the subscriber guidance they gave for this quarter may be too low.
Netflix CEO Reed HastingsFlickrNetflix missed its subscriber growth targets during the first quarter, blaming the shortfall on slight delays in the release dates for some of its most popular shows.
"If you look across the 12-month trend, we've still got a lot of great growth", Netflix Chief Financial Officer David Wells said on a conference call with analysts.
Netflix issued its first quarter user gains report to investors today, and the fact that it fell short of user growth estimates caused a brief drop in the streaming giant's stock price. The company has expanded in stages, and is having more success with older markets. That comes on the heels of Netflix'sbiggest quarter for new subscribers ever.
In terms of revenue, Netflix saw a 35% year-over-year increase to reach $2.64 billion in the first quarter, meeting expectations, and EPS was $.40 per share, above the $0.37 that analysts expected.
In the U.S., revenues and profits both grew, hitting $1.5 billion and $606 million respectively.
Netflix is spending a reported $6 billion on original content for 2017, which sounds like an astronomical figure.
On Wednesday, Netflix stock was on track for its worst day in five months, although it showed resistance just under $142 a share.