Netflix shares moved firmly higher in early Wednesday trading, and look set to pass the $1,000 mark for the first time on record, following a blowout set of fourth quarter earnings that cemented its lead as the world’s biggest streaming group and triggered a flurry of upgrades from analysts on Wall Street.
Netflix (NFLX) blasted through Wall Street’s forecast for subscriber gains, adding 18.9 million new sign-ups over the three months ending in December to take its total global tally past 300 million for the first time ever.
The group’s big bet on live events, including WWE wrestling, a celebrity box match between Jake Paul and Mike Tyson, as well as a Christmas Day NFL matchups that set new streaming records, helped both the stronger-than-expected sign ups and an all-time high revenue total of $10.2 billion.
Heading into 2025, Netflix’s focus on sports, new premium content and the expansion of its ad-supported tier has it projecting full-year revenues of between $43.56 billion and $44.5 billion.
It’s also raising prices in its two key markets, the U.S. and Canada, as it extends its bet that live events will attract new users and its broad range of sign-up options will allow for more flexibility and household sharing.
Netflix’s focus on live sporting events, including a Christmas Day slate of NFL games, helped drive record revenues and new sign-ups of nearly 19 million.
“This year, we’ve maintained very healthy engagement, about two hours of viewing per member per day, and engagement on a per-owner household is up through the first three quarters of 2024,” CEO Ted Sarandos told investors on a conference call late Tuesday.
Netflix wins on live events
“And we also have got some really amazing live events coming up. So, when we look forward into 2025 and beyond, we want to build on that success,” he added. “We plan to build on that success.”
The stronger-than-expected results look set to add around $53 billion to Netflix’s market value at the start of trading on Wednesday, and have triggered a host of price target upgrades from analysts on Wall Street.
JPMorgan analyst Doub Anmuth, who took his price target $150 higher to $1,000 per share with an ‘overweight’ rating, said his bull thesis on the stock is tied to its improving margins, free-cash flow ramp and its leadership position in the streaming space tied to its 302 million user base.
“More specifically, we believe Netflix’s global scale, strong engagement (~2 hours/day), & diversified content will push Netflix toward becoming the default choice for how users consume TV, film, & other long-form content,” he said.
Benchmark analyst Matthew Harrigan, who lifted his rating on Netflix to ‘hold’ from ‘sell’, sees Netflix likely adding another 250 million new subscribers this year.
“Netflix is opportunistic on high advertising appeal sports programming, with special events like the Mike Tyson Logan Paul fight and Christmas NFL games as well as the new WWE weekly show Raw,” he said.
“Beyond new seasons for the major series Wednesday, Stranger Things and Squid Games, Netflix will have new films from Guillermo del Toro, Kathryn Bigelow, Noah Baumbach, the Russo Brothers and a new Knives Out film,’ Harrigan added.
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Pivotal Research analyst Jeffrey Wlodarczak argued that Netflix is using its massive scale to produce free cash flow that it can invest into new content that accelerates its growth “while its streaming peers generate substantial losses.”
“Our view remains unchanged that Netflix has won the global streaming race as evidenced by ‘24 results/raised ’25 guidance (especially relative to its streaming peers’ results), and this is what, in our opinion, winning looks like,” said Wlodarczak, who took his price target to a Wall Street high of $1,250.
“The key for Netflix going forward is to press their advantages and keep the subscriber/[revenue per user] flywheel going because the larger they get the more leverage they have over their peers/content creators, the better their product gets, the more cash they have to spend on compelling content and the bigger the moat grows around their core business model,” he said.
Other price target changes include Morgan Stanley analyst Benjamin Swinburne, who lifted his by $100 to $1,150 following last night’s earnings update.
BMO Capital analyst Brian Pitz raised his price target by $175, taking it to $1,175 per share, with BofA Securities analyst Jessica Reif Ehrlich making a similar adjustment. Jefferies analyst Andrew Uerkwitz lifted his by $200 to $1,200 per share.
Netflix shares were marked 15% higher in premarket trading to indicate an opening bell price of $1,000.05 each.
