shares of Netflix NFLX are still below their peak but the odds of a complete reversal are improving. Q1 results were mixed, but factors in the report suggest business will accelerate through the end of the year. This has caused analysts to change their mood and targets and the takeaway from the activity is bullish. The caveat is that current targets could cap gains near recent highs, at least in the short term.

In this scenario, the stock will trade sideways until later in the year when Q2 and Q3 results are due. If these results are what the market is expecting, analysts could raise their targets further and propel this stock above $400 even. If not, Netflix stock could be set for another significant drop.

Netflix moves down on mixed results

Netflix is ​​down sharply after the first quarter release because the news is mixed and the expected rollout of password locks has been slower than anticipated. That aside, the company delivered 3.7% growth, albeit a little slower than expected. The margin of error is so small that it doesn’t matter, and the end results were better than expected with an equally small margin.

The upshot is that without the introduction of password protection, which is still on the table, the results are as expected. The company says the results suggest the company will see an initial drop in subscriptions, followed by a return to growth as password locks hit Netflix’s biggest market. People clip Netflix long enough to realize they’d rather pay for it than not have it.

Margin contracted year-over-year, which was expected, but the decline was smaller than forecast. The decline is primarily due to headwinds in FX markets, which are unlikely to abate this year. Operating margin was 21%, down 400 basis points year-over-year, and the decline is expected to continue in the coming quarters. Regardless, the $2.88 in GAAP earnings is more than enough to sustain operations, make buybacks…