Netflix (NASDAQ: NFLX) is grabbing headlines once again as analysts from top Wall Street firms revise their stock price targets following the company’s impressive Q3 2024 earnings.
Netflix is currently at an all-time high on October 18, with NFLX shares trading hands at $753.72, up +$66.06 (9.61%) from the previous close, at the time of publication.
The streaming giant’s strong quarterly performance, which saw profits soar by 41% and the addition of 5.1 million new subscribers, has fueled optimism for the final quarter of the year.
Picks for you
Analysts set Netflix stock price targets
In light of these developments, several leading analysts have updated their price targets. Brian Pitz from BMO Capital raised his target to a range of $770 to $825, maintaining a Buy rating with a 10.02% upside.
Doug Anmuth of J.P. Morgan is even more bullish, raising his target from $750 to $850, marking a 13.35% upside. J.P. Morgan highlighted that Netflix provided an earlier-than-anticipated forecast for its 2025 revenue, projecting $43 billion to $44 billion, which represents a growth range of 11%-13%.
The company also set expectations for an operating margin of 28%. J.P. Morgan emphasized that Netflix remains one of its top picks, citing these strong growth projections and operational improvements.
Elsewhere, Benjamin Swinburne of Morgan Stanley set his price target at $830, reiterating his Buy rating and projecting a 10.68% upside. Jason Helfstein from Oppenheimer also reiterated a Buy rating with a price target of $825, seeing a 10.02% upside.
Netflix bears
On the more cautious side Brian White of Monness maintained a Hold rating without issuing a price target, reflecting a more conservative outlook amid concerns of potential competition and ARPU pressures.
Kannan Venkateshwar of Barclays remains the outlier, reiterating a ‘Sell’ rating with a target of $550, reflecting a downside of -26.65%.
Barclays believes Netflix’s margin expansion will slow in 2025 and beyond. While strong in 2024, the firm’s standout performance was largely driven by lower marketing and content costs—factors that won’t be as influential moving forward.
Marketing expenses, in particular, increased more than expected in the latest quarter, and Netflix anticipates even higher costs next year, especially with efforts to boost ad revenue.
Barclays also noted that rising content spend could limit margin gains. As Netflix’s ad revenue share grows, justifying its current valuation premium could become more challenging, especially compared to other high-growth, ad-driven companies.
Netflix Q3 outperformance
The company’s Q3 outperformance can be attributed to its strict enforcement of password-sharing rules and the continued success of its ad-supported plans—two strategies that have allowed Netflix to maintain its lead in a highly competitive streaming market.
Looking ahead, Netflix is also expected to benefit from planned price increases for its Basic and Premium subscription tiers in key markets, which could drive significant revenue growth in 2025.
Despite these successes, some analysts have flagged concerns over declining average revenue per user (ARPU) in certain regions, which could impact future expansion. However, Netflix’s focus on monetizing password-sharing and further expanding its ad-supported model is seen as a potential counterbalance to these challenges, providing the company with additional growth opportunities.
Can Netflix sustain its momentum?
While the stock’s performance and Q3 results have reaffirmed Netflix’s market leadership, challenges remain on the horizon.
The decline in ARPU in certain regions is a critical factor to watch, though Netflix’s focus on monetizing password-sharing and expanding its ad-supported tiers could help mitigate those risks.
With continued subscriber growth, expanding revenue opportunities, and strategic price hikes planned for 2025, Netflix looks well-positioned to maintain its momentum.
