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One of the most negative Netflix analysts on Wall Street explains what would make him change his tune (NFLX)

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  • Wedbush has one of the most bearish outlooks on Netflix of any Wall Street shop.
  • But after the company’s earnings on Thursday, the firm’s analysts lifted their price target and said they would reconsider their “underperform” rating should Netflix’s cash burn stabilize.
  • One of those analysts told Business Insider he would reconsider his rating and price target if Netflix were to aggressively reverse its cash burn.
  • That would get me to a $256 price target, and I’d reconsider upgrading to Neutral then,” he said in an email.
  • Watch trade Netflix live here.

Wall Street analysts on Friday were heaping praise onto Netflix following the streaming giant’s quarterly earnings report, raising their price targets and recommending investors buy up the name. They cited strong content slates and solid subscriber-growth momentum.

One of the most negative firms on the name even bumped up its target, though it said the company’s cash burn was still a massive concern.

Netflix reported quarterly earnings-per-share estimates on Thursday that exceeded analysts’ expectations, but it fell slightly short of revenue expectations. The company reiterated its expectation for its 2019 cash burn to be similar to that of 2018, implying negative free cash flow of about $3 billion despite its roughly $1.5 billion in incremental revenue that should result from the price hike it announced earlier this week.

Now read: ‘Take off the blindfold’: Here’s what Wall Street is saying about Netflix earnings

Michael Pachter and his team at Wedbush wrote that they expected Netflix’s content spending to “trigger substantial cash burn for many years” and said future price hikes could cause a slowdown in subscriber growth. They maintained their “underperform” rating and raised their 12-month price target to $165 a share from $150. Still, the higher number is more than 50% below where shares were trading Friday.

Their new target reflects the impact of Netflix’s recently announced price increase and new subscriber-growth outlook. Pachter told Business Insider what he’d need to see from the company to view the streaming platform more positively.

I’ll reconsider my rating and price target if they reverse faster,” he wrote in an email. “If they go from $(3) billion in 2018 to $(1) billion in 2019 and to $1 billion positive in 2020, I will give them credit for that.”

Pachter said with $2 billion of annual free-cash-flow growth, Netflix would have to pay back $11 billion and finish that by 2023, with a $7 billion free-cash-flow rate.

“20x $7 billion = $140 billion, and I would only have to discount that back for four years,” he wrote. “That would get me to a $256 price target, and I’d reconsider upgrading to Neutral then.”

To be sure, this outlook is the exception, not the rule, on Wall Street. Analysts surveyed by Bloomberg overwhelmingly rate the stock a “buy,” with a price target of $395 a share on average — about 16% higher than where the stock was trading Friday.

Netflix was up 33% this year through Thursday. 

Read more about Netflix:

Netflix shares.Markets Insider

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More groups join in support of women in STEM program at Carleton

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OTTAWA — Major companies and government partners are lending their support to Carleton University’s newly established Women in Engineering and Information Technology Program.

The list of supporters includes Mississauga-based construction company EllisDon.

The latest to announce their support for the program also include BlackBerry QNX, CIRA (Canadian Internet Registration Authority), Ericsson, Nokia, Solace, Trend Micro, the Canadian Nuclear Safety Commission, CGI, Gastops, Leonardo DRS, Lockheed Martin Canada, Amdocs and Ross.

The program is officially set to launch this September.

It is being led by Carleton’s Faculty of Engineering and Design with the goal of establishing meaningful partnerships in support of women in STEM.  

The program will host events for women students to build relationships with industry and government partners, create mentorship opportunities, as well as establish a special fund to support allies at Carleton in meeting equity, diversity and inclusion goals.

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VR tech to revolutionize commercial driver training

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Serious Labs seems to have found a way from tragedy to triumph? The Edmonton-based firm designs and manufactures virtual reality simulators to standardize training programs for operators of heavy equipment such as aerial lifts, cranes, forklifts, and commercial trucks. These simulators enable operators to acquire and practice operational skills for the job safety and efficiency in a risk-free virtual environment so they can work more safely and efficiently.

The 2018 Humboldt bus catastrophe sent shock waves across the industry. The tragedy highlighted the need for standardized commercial driver training and testing. It also contributed to the acceleration of the federal government implementing a Mandatory Entry-Level Training (MELT) program for Class 1 & 2 drivers currently being adopted across Canada. MELT is a much more rigorous standard that promotes safety and in-depth practice for new drivers.

Enter Serious Labs. By proposing to harness the power of virtual reality (VR), Serious Labs has earned considerable funding to develop a VR commercial truck driving simulator.

The Government of Alberta has awarded $1 million, and Emissions Reduction Alberta (ERA) is contributing an additional $2 million for the simulator development. Commercial deployment is estimated to begin in 2024, with the simulator to be made available across Canada and the United States, and with the Alberta Motor Transport Association (AMTA) helping to provide simulator tests to certify that driver trainees have attained the appropriate standard. West Tech Report recently took the opportunity to chat with Serious Labs CEO, Jim Colvin, about the environmental and labour benefits of VR Driver Training, as well as the unique way that Colvin went from angel investor to CEO of the company.

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Next-Gen Tech Company Pops on New Cover Detection Test

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While the world comes out of the initial stages of the pandemic, COVID-19 will be continue to be a threat for some time to come. Companies, such as Zen Graphene, are working on ways to detect the virus and its variants and are on the forefronts of technology.

Nanotechnology firm ZEN Graphene Solutions Ltd. (TSX-Venture:ZEN) (OTCPK:ZENYF), is working to develop technology to help detect the COVID-19 virus and its variants. The firm signed an exclusive agreement with McMaster University to be the global commercializing partner for a newly developed aptamer-based, SARS-CoV-2 rapid detection technology.

This patent-pending technology uses clinical samples from patients and was funded by the Canadian Institutes of Health Research. The test is considered extremely accurate, scalable, saliva-based, affordable, and provides results in under 10 minutes.

Shares were trading up over 5% to $3.07 in early afternoon trade.

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