NFLX: B Riley Ups Target to $125; Problems Remain, Says Caris

Netflix (NFLX) shares today are down $2.86, or 2.8%, at $100.60, amidst something of a tussle between bull and bear, ahead of the company’s Q4 report, which is expected after market close on Wednesday.

Caris & Co.’s David Miller, who has a “Below Average” rating on the stock, today writes that the basic situation of fixing a damaged brand, and paying to expand internationally, is still the basic problem for the company.

Despite a parabolic move higher in tandem with massive short covering seen of late amongst many OTC names, we expect NFLX to reiterate F2012 operating losses for at least the next two quarters, as the costs of re-marketing the �Netflix� brand to ex-subscribers, plus the cost of entry into the U.K. and Ireland, will shroud any domestic profits seen over that timeframe.

Miller is estimating $846.2 million in revenue last quarter, and 49 cents per share in profit, which is below the consensus $857 million and 56 cents.

Miller thinks Netflix ended the quarter with 1.03 million new subs, net, for a total of 26.3 million.

Miller also hopes to hear something on the call as to whether Netflix will have to pay higher fees to�EPIX, the joint venture made up of Viacom (VIAB), Lionsgate (LGF), and MGM, given that Starz is no longer available to Netflix.

In contrast, B. Riley & Co.’s Eric Wold, who has a Buy rating on shares of Netflix (NFLX), this morning raised his price target to $125 from $100, writing that “we remain optimistic Netflix’s domestic positioning and market share potential remains strong.”

The key item is not a beat or a miss next week, but the domestic sub count at quarter’s end, writes Wold. He thinks the tally at the end of Q4 may have been 24.2 million, and that it’s possible that rises this quarter to 25.9 million. He sees 26.01 million total subs at the end of last quarter.

Wold’s estimate for Q4 is $858.6 million in revenue and 54 cents a share, versus the consensus of $857 million and 56 cents.

While Netflix is the leader in the video on demand industry writ broadly, with 55% share, Wold says its key to hear about how subs are going and how international is looking, noting “strong initial results from the Latin American launch will help revive optimism towards NFLX not being just a domestic-only phenomenon.”

Wold’s loss-per-share estimate for this year is 24 cents, worse than the consensus of 25 cents profit.