Shares of Netflix (NASDAQ: NFLX) soared by 11% during the January 22 trading session, hitting an all-time high of $999. The surge followed a record-breaking holiday quarter, during which the streaming giant added 18.9 million subscribers, far surpassing Wall Street expectations.
The impressive growth, driven by Netflix’s strategic foray into live sports and hit content, has led analysts to revise their price targets significantly upward.
As of press time, Netflix shares are trading at $959.34, reflecting a 4% pullback from their peak. Despite this slight retracement, the stock remains up 7% year-to-date.
Picks for you
Record-breaking subscriber growth
The 18.9 million subscriber increase in Q4 2024 surpassed Wall Street’s expectations by a wide margin, bringing Netflix’s global subscriber base to over 300 million.
This marks Netflix’s best performance since Q1 2020. The company’s decision to expand into live sports, such as the record-breaking Jake Paul vs. Mike Tyson boxing match on November 15 and NFL games on Christmas Day, significantly contributed to the growth.
The Paul-Tyson bout became the most-streamed sporting event, driving the highest single-day sign-ups since 2019.
In addition to sports, hit shows like Squid Game Season 2 and the movie Carry-On played a crucial role in engaging subscribers.
Netflix also announced price hikes in key markets, including the U.S., Canada, and Argentina, to boost revenue. The most popular U.S. plan now costs $17.99 per month, an increase of $2.50, while its advertising-supported tier has also seen price adjustments.
Netflix reported a 16% increase in revenue to $10.2 billion for Q4, marking its largest growth since late 2021. The company projects full-year revenue of up to $44.5 billion in 2025, with an operating margin of 29%.
Analysts revise Netflix price targets
Following the Q4 results, several analysts from major firms have revised their price targets for Netflix. For instance, Rosenblatt upgraded Netflix to ‘Buy’ from ‘Neutral,’ raising its price target significantly to $1,494 from $680, citing that the company ‘delivered on so many levels’ during the quarter.
Similarly, Canaccord upgraded its rating to ‘Buy’ from ‘Hold,’ raising the price target to $1,150 from $940, signaling strong growth in paid memberships, revenue, and profitability.
Barclays also adjusted its stance, upgrading Netflix to ‘Equal Weight’ from ‘Underweight,’ with a revised price target of $900, up from $715.
Meanwhile, Benchmark upgraded the stock to ‘Hold’ from ‘Sell,’ signaling increased optimism about Netflix’s outlook despite not assigning a specific price target.
Featured image via Shutterstock
