Netflix's stock skyrocketed by over 11%, closing at an all-time high of $763.89 on Friday after delivering a robust third-quarter earnings report. The company exceeded Wall Street expectations by posting $9.83 billion in revenue, slightly higher than the $9.78 billion forecast. The streaming giant also outperformed subscriber growth projections, adding 5.07 million new subscribers compared to the anticipated 4.5 million.
This success was driven by the rapid expansion of Netflix’s ad-supported membership tier, which saw a 35% growth from the previous quarter. In regions where the ad-supported option is available, it accounted for over half of new signups, signaling strong consumer interest and reinforcing Netflix’s efforts to curb password sharing.
Netflix's forward guidance further fueled investor optimism. The company projected fourth-quarter revenue to rise by 14.7% to $10.13 billion and estimated 2025 revenue between $43 billion and $44 billion, representing an 11% increase from 2024 expectations. These optimistic projections highlight Netflix's confidence in its strategy amid the intense competition in the streaming landscape.
Following the earnings beat, several prominent financial institutions revised their price targets for Netflix. UBS raised its target from $750 to $825, citing a balanced approach to expansion through ads, gaming, and live content. Bank of America also increased its price objective to $800, highlighting multiple growth drivers into 2025. Morgan Stanley raised its bullish target to $830, emphasizing the potential for Netflix to boost earnings by 20%-30% in the coming years through continued innovation in advertising and live content.
Analysts believe Netflix remains one of the best-positioned media companies due to its strong global brand, innovative offerings, and multiple avenues for revenue growth. With its continued dominance in the streaming industry and focus on new growth areas like gaming and live content, Netflix is expected to maintain its leadership position and outperform its competitors in the years ahead.
This success was driven by the rapid expansion of Netflix’s ad-supported membership tier, which saw a 35% growth from the previous quarter. In regions where the ad-supported option is available, it accounted for over half of new signups, signaling strong consumer interest and reinforcing Netflix’s efforts to curb password sharing.
Netflix's forward guidance further fueled investor optimism. The company projected fourth-quarter revenue to rise by 14.7% to $10.13 billion and estimated 2025 revenue between $43 billion and $44 billion, representing an 11% increase from 2024 expectations. These optimistic projections highlight Netflix's confidence in its strategy amid the intense competition in the streaming landscape.
Following the earnings beat, several prominent financial institutions revised their price targets for Netflix. UBS raised its target from $750 to $825, citing a balanced approach to expansion through ads, gaming, and live content. Bank of America also increased its price objective to $800, highlighting multiple growth drivers into 2025. Morgan Stanley raised its bullish target to $830, emphasizing the potential for Netflix to boost earnings by 20%-30% in the coming years through continued innovation in advertising and live content.
Analysts believe Netflix remains one of the best-positioned media companies due to its strong global brand, innovative offerings, and multiple avenues for revenue growth. With its continued dominance in the streaming industry and focus on new growth areas like gaming and live content, Netflix is expected to maintain its leadership position and outperform its competitors in the years ahead.