In its final quarterly subscriber disclosure late on Tuesday, Netflix excited Wall Street experts by posting a subscriber growth record and unveiling its latest set of price increases that will come into effect across most plans in the U.S., Canada, Portugal and Argentina.
Upside user and financial surprises were driven by Netflix’s push into live sports, including NFL games and boxing, as well as such hit originals as season 2 of Squid Game.
Given the business momentum and 2024 run-up of the streaming giant’s stock, some discussed whether the company’s growth could continue, but many further boosted their stock price targets. One recurring theme in their commentary was that there is more upside ahead for Netflix.
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And Netflix shares in early Wednesday trading jumped to an all-time high of $999. As of 9:33 a.m. ET, they were trading up 12.2 percent at $975.33.
“Records Are Made to Be Broken; Despite Huge Quarter Netflix Has Runway Ahead” was the headline that Guggenheim analyst Michael Morris used for his report. Raising his multi-year financial estimates, he boosted his stock price target from $950 to $1,100.
“Netflix fourth-quarter results surpassed guidance on all financial metrics with an all-time quarterly record 19 million net member ads, nearly doubling the consensus estimate,” he summarized his takeaways. “As good as it gets? We don’t think so.”
Explaining his confidence, Morris emphasized that “for starters, the company notes a potential subscriber total addressable market that has expanded to 750 million-plus broadband homes (excluding China/Russia), implying 35 percent international penetration versus the U.S. at 66 percent (and still growing).”
In addition, “viewer engagement continues to strengthen with domestic December viewership growth of about 16 percent and all-time high U.S. TV share at 8.5 percent,” the Guggenheim expert highlighted.
For this year, Morris increased his subscriber growth forecast from 21 million to 25 million, with advertising tier users accounting for 47 percent, consistent with 2024.
Morgan Stanley analyst Benjamin Swinburne also maintained his “buy” rating on Netflix shares while raising his price target by $100 to $1,150, noting in a report entitled “Carry-On” that he also raised his estimates for the firm “following stronger-than-expected results and guidance.”
“Unmatched scale creates the financial capacity to invest back into the business,” the analyst emphasized. “A culture of innovation and track record of execution gives us conviction these investments further increase long-term earnings power.” He also called Netflix’s crossing the 300 million global member mark “a milestone, not a destination,” pointing out that “in its most mature market, the U.S./Canada, the 9.5 million net adds in ’24 were about 30 percent higher than its prior best.”
Bank of America analyst Jessica Reif Ehrlich reiterated her “buy” rating and raised her price target to $1,175 from $1,000. In her report “Spiking Net Adds,” she highlighted “continued positive subscriber and earnings momentum as well as drivers, including evolving advertising and live opportunities.”
Wedbush analyst Michael Pachter also remains bullish on Netflix, entitling his Wednesday report “Going Out With a Bang in 2024, But Excitement Ahead.”
“Netflix is positioned to accelerate ad tier revenue contribution for the next several years by adding more live events, improving its advertising solutions and targeting, and broadening its content strategy,” he wrote. “While massive subscriber growth was the primary driver in 2024, we expect price increases to drive revenue growth in 2025 and the ad tier to drive revenue higher in 2026. As Netflix expands from here, its contribution margin can massively exceed our estimates, driving outsized free cash flow.”
As a result, Pachter reiterated his “outperform” rating on the stock while lifting his price target from $950 to $1,150.
“Going Out With a Bang” was also the headline that Macquarie analyst Tim Nollen chose as he reiterated his “outperform” rating on Netflix with a new stock price target of $1,150, up from $965 due to his increased estimates. “With no more sub reporting to come, investor focus shifts to Netflix’s ability to monetize its member base,” he noted. “Advertising and price increases help answer this.”
Sports metaphors also were popular among Wall Street observers. “In pole position to scale nascent ad budgets” was the headline used by BMO Capital Markets analyst Brian Pitz as he also reiterated his “outperform” rating and raised his stock price target by $175 to $1,175.
“AVOD upside/pricing optionality drove all-time high net subs growth of about 19 million,” he noted. “Ad revenue grew 2x in 2024 and is expected to 2x again in 2025, given scale (70 million monthly active users), with upside.” He added: “AVOD monetization potential remains a significant opportunity.”
The same goes for fees that the streamer is charging its subscribers. Addressing management’s unveiled user price hikes, Pitz said: “Pricing is just one lever Netflix has to expand customer optionality and improve monetization.”
Evercore ISI analyst Mark Mahaney used a different sports reference in the title of his report: “How Do You Say Touchdown in Korean?!” in which he reiterated his “outperform” rating on the stock, while boosting his price target from $950 to $1,100.
“The key bullish takes were: a) a record high 19 million sub net adds quarter; b) an increased full-year 2025 revenue guide (despite $1 billion in incremental foreign-exchange headwinds), and c) the announcement of price increases,” he concluded. “Netflix is simply running away with the streaming market thanks to excellent execution, a stellar content slate, and scale advantages.”
Pivotal Research Group analyst Jeff Wlodarczak remains the biggest Netflix bull on the Street. “This is What Winning Looks Like,” he said in the title of his report, using the same bullish headline he had also written a year ago. And he reiterated his “buy” rating and upped his stock price target by $150 to $1,250. “Netflix offers an extremely compelling price to entertainment value (that is continually improving) boosted by their ad-supported offering that should allow the company to continue to generate solid subscriber growth and average revenue per user growth,” which he called “a powerful combo.”
Meanwhile, Bernstein analyst Laurent Yoon shared that he initially thought Netflix’s results announcement included a type. “No puns. We thought it was a typo,” he wrote. “Netflix defied the odds once again, delivering net adds far beyond even the most unreasonable (or so we thought) subscriber bogey we heard.”
His takeaway: “The company’s guidance, along with their strong momentum going into ‘25 – even in the face of foreign-exchange headwinds – looks bullish, and so do we.” Yoon also pointed out that “every region contributed over 4 million net additions, demonstrating that Netflix’s market-specific approach to driving penetration is working effectively,” adding: “NFL games did not move the needle beyond the U.S. market, confirming that Netflix is honing its product-market fit to drive growth in international markets.”
The Bernstein analyst is also bullish on the streamer’s ad tier. “Netflix is making steady progress in its ads business, moving from crawling to walking, with the components needed to drive growth beginning to take shape,” he argued. “This expanding ad-tier base will increase Netflix’s potential to amplify monetization as it secures a seat at the table with the big boys (it already has, just not the best seat, yet).”
Maintaining his “market-perform” rating on Netflix, he raised his stock price target by $175 to $975, “driven by higher subscriber growth and margins expanding faster, resulting in a higher market multiple.” And he acknowledged “the potential for further upside driven by ad market recovery and ensuing investor sentiment.”
MoffettNathanson analyst Robert Fishman also stuck to a less bullish rating of “neutral” but lifted his stock price target by $180 to $850. “Our faster-than-expected growth for both revenue and (earnings) margins in 2025 and beyond leads to meaningful positive revisions to our forecasts through 2030,” his report noted.
About Netflix subscriber growth record, he said that “this is one example, of which there are unfortunately many, in which Netflix proved us wrong.” And he added: “At almost every turn we tried to apply the general laws of corporate physics as best as we understood them to a company that, at the end of the day, is still in the business of selling video entertainment. Yet, Netflix executed almost flawlessly throughout the past year and, time and time again, demonstrated it is impervious to any notion of gravity.”
Now the key question is: “Can Netflix pull this off again and post similar subscriber gains in 2025?” Fishman’s take: “With the company choosing to forgo disclosing subscriber metrics from here on out (except for key milestones), we might not have the same level of clarity. Still, we significantly raise our 2025 subscriber growth forecast by 7 million to 25 million total net adds. If 2024 showed us anything, that could still end up being conservative.”
And Edward Jones analyst David Heger maintained his “hold” rating on Netflix without a stock price target. “Netflix benefited from streaming two NFL games on Christmas Day and the return of the popular Squid Games series. Also, its slate of new shows has returned to normal following the impact of the writers and actors strikes earlier in the year,” he wrote. “We think that subscriber growth will slow somewhat in 2025, as Netflix has passed the anniversary of when it started charging a fee for shared accounts. However, we believe it can continue to drive revenue growth from planned price increases and subscribers increasingly adopting ad-supported services.”
