Analysts race to overhaul Netflix stock price target after Q4 earnings

Martin Baccardax

Wed, Jan 22, 2025, 6:06 AM 4 min read

The group's big bet on live events, including WWE wrestling, a celebrity boxing match between Jake Paul and Mike Tyson, as well as Christmas Day National Football League matchups that set new streaming records, helped both the stronger-than-expected signups 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 have it projecting full-year revenue 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 signup options will enable more flexibility and household sharing.

"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," Chief Executive 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.

JP Morgan analyst Doug 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 the company's improving margins, free-cash-flow ramp and 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), and diversified content will push Netflix toward becoming the default choice for how users consume TV, film and other long-form content," he said.

Half a billion subscribers in sight

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 was using its massive scale to produce free cash flow. It can invest the funds into new content that accelerates its growth "while its streaming peers generate substantial losses," he said.

"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 ... winning looks like," said Wlodarczak, who took his price target to a Wall Street high of $1,250.

Netflix the clear streaming leader

"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 to $1,175 per share, and B of A Securities analyst Jessica Reif Ehrlich made a similar adjustment. Jefferies analyst Andrew Uerkwitz lifted his by $200 to $1,200.

Netflix shares were marked 15% higher in premarket trading to indicate an opening bell price of $1,000.05.

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