Goldman analyst Heath Terry notes in the report that only 3 percent of Netflix’s user base consists of children. Even a 5 or 10-percent upward swing could yield massive profits.
Kids have more access to mobile devices and the Internet than ever before (even just a couple years ago) and, as the team behind Goldman’s report notes, this phenomenon is opening up online video-streaming to more and more children: “Kids aged 0-8 in the U.S. are increasingly gaining access to mobile devices, as 75 percent of kids now have access … compared to 52 percent just two years ago, according to Common Sense Media. Interestingly, 7 percent of kids already have their own tablets, and to put this into perspective, only 8 percent of adults had their own tablets just two years ago.”
At the center of Goldman’s report is the firm’s upgrading of Netflix stock from neutral to buy – Terry raised the stock’s price target from to $590 from $380, marking a 34-percent premium over the stock’s $440 close on Monday, according to coverage by Forbes.