Yahoo Finance Plus' investment idea of the day is Netflix

Yahoo Finance’s Alexis Christoforous, Jared Blikre and Kristin Myers discuss why investors are eyeing Netflix.

Video transcript

KRISTIN MYERS: All right, Jared, let's look at the Yahoo Finance Plus Investment Idea of the Day. It is a bullish call on Netflix. What's behind that call?

JARED BLIKRE: Well, this is Argus Research, and let's take a look at what they're saying today. Now they actually-- let me go back here because they issued a report at this other time. This was late March. And they had a long-term price target of $650. And even after that really nasty miss the other day on subscriber growth, they're still maintaining that price target of $150.

And here's their reasoning. Now Netflix missed its all important subscriber growth target in the first quarter. As usual, the market punished Netflix shares. Go into some more details about the churn and et cetera. But they're raising their 2021 EPS estimates to $10.73. While the valuation metrics for Netflix remain well above the pure average, they have improved with the recent sell-off and in our view, provide investors with an appropriate entry point.

Now this is a year to date chart. You can see that it's pretty choppy here. You go back one year and you can see the early gains from the pandemic, but it's been pretty choppy ever since. So Netflix really just looking for support at 500 and perhaps a catalyst to finally break this trading range.