Netflix Inc (NFLX)

[The Rainmaker]

Morgan Stanley: NFLX "We continue to believe Netflix will scale to a large and highly profitable business, and 1Q results highlight continued momentum on both scale and margins. In a rare combination, subscriber growth exceeded expectations AND expectations for margin expansion for the year increased. Importantly, as the company pivots its incremental spending from content first towards marketing, there are some early signs that operating leverage is increasing and cash burn perhaps peaking. If Netflix continues to outperform its own expectations for net adds, it is even more likely it will begin expanding margins more rapidly and reducing its cash burn levels."