Andy Hargreaves (Pacific Crest): "Buy Netflix stock ahead of earnings"

Investors should buy Netflix Inc.’s stock ahead of the video-streaming services first-quarter results, as fears over a disappointing outlook for U.S. subscriber growth are overdone and short sighted, analyst Andy Hargreaves at Pacific Crest said Monday.

Hargreaves affirmed his overweight rating and kept his stock price target of $140, which is 32% above Friday’s closing price of $105.70.

The stock NFLX, -1.28%  inched up less than 0.1% in premarket trade. It has dropped 7.6% year to date, while the S&P 500 has gained 1.4%.

Hargreaves said he expects Netflix’s second-quarter outlook for U.S. net subscriber additions will be about 260,000, which is below current consensus analyst projections, but he believes international subscriber additions could “meaningfully” beat forecasts.

“Investors are currently embroiled in a heated debate over a few hundred thousand U.S. subscribers,” Hargreaves wrote in a note to clients. “In the meantime, Netflix’s global expansion creates potential upside that is measured in the millions.”

Once Netflix reports results, which are scheduled for April 18, Hargreaves expects investors to start focusing on the larger international opportunity.

“Don’t step over quarters to pick up dimes,” Hargreaves said. “Buy (Netflix).”