Netflix's recent price cuts could actually raise revenue and be a test for its future: Citi
Wachiwit

Netflix (NASDAQ:NFLX) recently enacted price cuts in roughly 100 of its smaller markets, but investment firm Citi said the actions are "inextricably" linked to the streaming giant's password sharing enforcement and could actually wind up boosting revenue.
Analyst Jason Bazinet, who has a buy rating on Netflix (NFLX) stock, said the price cuts - which amount to a roughly 50% drop - could wind up boosting the company's aggregate revenue by 1% and help align the retail price in the markets "with the utility each user derives from the service," compared to the household that pays for the service.
Looking at it from a holistic standpoint, the advertising market in the roughly 100 markets that Netflix (NFLX) lowered the price point of its subscription is small and penetration rates are low, making an ad-supported subscription not feasible in these markets. 
Additionally, Netflix (NFLX) is only enforcing password sharing in four markets - Canada, Spain, New Zealand and Portugal - and only Canada and Spain have the ad tier. As such, it's possible the performance of these markets could dictate how Netflix (NFLX) handles the roughly 90 "status quo" markets. 
"If the ad tier performs well, the ad tier may expand," Bazinet wrote in the investor note. "If it does not, we could see price cuts expand beyond the current footprint of [roughly] 100 markets."
Bazinet also slightly tweaked the per-share price target to $400 from $395 in the note.
Netflix (NFLX) shares finished up slightly more than 2% on Thursday.
On Wednesday, investment firm Oppenheimer said that the recent pullback in Netflix (NFLX) stock is a buying opportunity.