Not so long ago, in 2022, streaming innovator Netflix (NASDAQ: NFLX) reported its first loss in net subscriber count in over a decade. A well-publicized crash from roughly $700 to approximately $200 ensued, following which the business announced plans to crack down on password sharing. Wall Street equity analysts were skeptical at first.
Since then, Netflix stock has been on a steady upward trajectory. At press time, the price of an NFLX share was $897.92. On a year-to-date (YTD) basis, the streaming service is up 91.66% — 38.54% of that growth occurred in the last six months, while 18.92% happened over the course of the last thirty days.
The primary driver behind this recent surge of momentum is the company’s Q3 2024 earnings call, held on October 17. It was a double beat — both revenue and earnings per share (EPS) outperformed analyst consensus estimates.
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In addition, on November 18, the bout between legendary boxer Mike Tyson and internet personality Jake Paul became the most streamed sporting event in history — with Netflix reaching 65 million concurrent viewers, and 108 viewers in total. The venture saw its market cap increase by $25 billion following the match.
Stock market researchers from some of Wall Street’s premier firms have been quite bullish on NFLX stock — and on December 2, two such analysts revised their price targets upward.
Analysts are eyeing the $940 – $950 level for Netflix stock
Maria Ripps, a senior internet research analyst at Canaccord Genuity, increased her price target to $940, up from $760, and maintained a prior ‘Hold’ rating. This came about as a result of a sector review. In a note shared with investors, Ripps opined that election results led to a boost in internet stock prices, primarily due to investors expecting AI deregulation, a more favorable backdrop for corporate acquisitions, and lower corporate tax rates.
Ripps also added that Canaccord ‘sees potential support for both solid fundamentals and further multiple expansion in high-quality names’ — supposing that the wider macro backdrop proves to be favorable going forward. If met, her $940 price target would represent a 4.68% upside.
Many of the same sentiments were echoed by Mark Mahaney, head of Evercore ISI’s internet research team. Mahaney raised his price target to a slightly more optimistic $950 for a 5.8% upside, up from $775 — and reiterated an ‘Outperform’ rating.
In his note, he also highlighted that the price target hike was based on Evercore’s own, detailed survey work in key markets such as The United States, France, and Germany. The researcher also added that Evercore sees ‘even further upside if Netflix returns to its historical price increase cadence’.
In all likelihood, the streaming giant will hold its next earnings call in late January 2025. While positive, neither of these revised price targets sees a strong upside in the near term — however, investors should note that at a forward price-to-earnings (P/E) ratio of 37.75, Netflix stock is relatively affordable — particularly for a household name and tech business.
Featured image via Shutterstock
