Despite facing initial challenges with its newly announced advertisement plan, Netflix (NASDAQ: NFLX) successfully ended the fiscal year 2023 with robust financial reports and promising guidance for the upcoming quarter.
Profitability was boosted by price increases and the implementation of a new ad plan, resulting in a 12% revenue growth for the company by the end of the year. Operating margin expansion was substantial, and a record-breaking Free Cash Flow (FCF) of $6.9 billion was achieved.
At the close of trading on February 21, NFLX ended at $573.35, reflecting a slight decrease of -0.31%. Despite this minor decline, the stock had shown a 1.08% increase over the previous five trading sessions and an impressive 18.04% gain over the past month, indicating a recent pattern of fluctuation.
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NFLX is trading close to its 52-week high, indicating positive momentum. However, the S&P500 Index is also reaching new highs, suggesting NFLX’s performance aligns with the overall market.
Over the past month, NFLX has fluctuated between $537.07 and $597.00, presenting a wide range. It is currently trading around the midpoint of this range, where prices have been consolidating recently. This could offer a potential entry opportunity, although there might be resistance above.
A support zone is identified between $550.04 and $569.67, comprising various trend lines and significant moving averages across multiple time frames.
Resistance is noted around $597.
Wall Street forecast for NFLX stock
Analysts on TradingView don’t appear overly impressed with NFLX’s strong financials, as only a fraction have given it a ‘buy’ rating. Out of 52 experts, 24 have designated it as a ‘strong buy,’ 7 as ‘buy,’ 18 as ‘hold,’ 1 as ‘sell,’ and 2 as ‘strong sell.’
Interestingly, the price target is $575.50, indicating a minimal increase from Netflix’s current stock price levels.
Observers also graded NFLX stock with the lowest target at $335 (-41.57%) and the highest at $700 (+22.09%).
Adaptability is key to success for NFLX stock
Netflix has demonstrated resilience and adaptability in navigating a challenging macroeconomic landscape over the past two years. Despite consumer cutbacks in discretionary spending impacting their financial performance, the company’s strategic initiatives, such as introducing a new ad plan membership and cracking down on password sharing, have proven effective.
The significant adoption of the ad plan membership, leading to a remarkable 70% quarter-over-quarter growth, presents substantial revenue growth opportunities as Netflix aims to scale its advertising revenue platform. The company’s guidance of $9.24 billion in revenue for Q1 FY24, indicating approximately 13% year-over-year growth, coupled with an expected expansion of operating margin, positions Netflix as one of the top tech stocks to consider for investment in 2024.
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