Streaming trailblazer Netflix (NASDAQ: NFLX) has been on quite the upward trajectory for the past two and a half years.
Netflix stock experienced a precipitous drop from $690 to just $174 from September 2021 to May 2022 — primarily on account of a challenging macro environment and falling subscriptions as consumers cut back on discretionary spending.
The shift toward ad-supported tiers was also heralded as the beginning of the end — yet NFLX shares have more than recovered — at press time, they were trading at $879.05, a new all-time high (ATH), with year-to-date (YTD) returns of 87.63%.
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What happened between these two events? For one, the ad-supported tiers didn’t cause the mass exodus that was widely predicted. In addition, a crackdown on password sharing, numerous licensing deals, and strategic global expansion went a long way in restoring investor confidence.
More recently, on October 17, the business released its Q3 2024 earnings report, which saw a beat in terms of both revenue and earnings — after which NFLX stock price shot up by 5.15% in short order.
Now, on the heels of the highly-watched bout between legendary boxer Mike Tyson and internet personality Jake Paul, which attracted more than 100 million viewers, one analyst has set a new price target — and it happens to be the highest one on the Street.
Jeffrey Wlodarczak sees Netflix stock reaching $1100
On November 20, the CEO and founder of Pivotal Research, Jeffrey Wlodarczak, who also serves as the firm’s chief internet, media & communications analyst, shared a note with investors.
He reiterated a previous ‘Buy’ rating — while simultaneously raising his price target from $925 to $1,100. If met, this ambitious mark would represent a 25% upside from the current Netflix stock price — at present, this is the highest price target of any Wall Street equity researcher.
In particular, Pivotal Research sees the aforementioned bout as a watershed moment. It was the most-streamed sporting event ever and caused the firm to revise medium and long-term subscriber revenue estimates. The expert noted that he expects the company to accelerate its offerings of ‘eventized’ live programming — particularly as the streaming giant is sitting on approximately $7 billion in cash, which allows it to easily acquire more sports rights.
In addition, Wlodarczak anticipates lower subscriber churn and a greater ability to take price — particularly in contrast with competitors, who, per the analyst, are struggling with substantial losses and mediocre growth, which will force their hand to eventually sell their content libraries to Netflix.
Finally, the researcher opined that ‘Netflix has won the global streaming race’, and that ‘this is what winning looks like’.
Featured image via Shutterstock
