Netflix

The following is a summary of the Netflix, Inc. (NFLX) Q4 2024 Earnings Call Transcript: Financial Performance: Netflix reported a strong end to 2024 with significant revenue contributions from both domestic and international markets, emphasizing a robust quarter without major financial setbacks due to operational disruptions. The price increases implemented have aligned smoothly with their market growth. Subscription growth excelled with 19 million additional subscribers in Q4, credited to a broad and diverse content library, not specifically dependent on live events or blockbuster titles. Operating margins improved as a result of strategic cost management, aligning selling, general, and administrative expenses with revenue growth and maintaining disciplined content spending, expected to rise from $17 billion in 2024 to around $18 billion in 2025. Business Progress: Netflix’s advertising plan has substantially increased its subscriber base, achieving rapid growth with 55% of sign-ups in Q4 coming from their new advertising model. Engagement with […]

Live sports, ad-supported plans and pricing strategies are among the items highlighted by a Netflix Inc (NASDAQ:NFLX) analyst ahead of the company’s fourth-quarter earnings report, which will include results from NFL games, a big boxing match and the premiere of a second season of “Squid Game.” The Netflix Analyst: Goldman Sachs analyst Eric Sheridan reiterated a Neutral rating on Netflix and raised the price target from $750 to $850. The Analyst Takeaways: Netflix outperforming the S&P 500 over the past 12 months comes with several key themes, Sheridan said in a new investor note. The analyst highlighted a competitive moat, a push into live sports and partnerships in advertising as key themes. “Initial forays into live sports/entertainment are the beginning of a multi-year narrative of compounded growth that will build in momentum,” Sheridan said. Sheridan said the key investor debates going forward are the pace of price increases, management commentary on live sports and the overall

Netflix (NFLX) provided “encouraging” 2025 revenue guidance and reported “strong” net subscriber additions in the third quarter, Wedbush Securities said in a note Friday. “The primary driver of this surge will be a more robust content slate than we have seen in 2024,” Wedbush said in a Friday note following Netflix’s Q3 results released Thursday. The firm said the company’s gain of 5.1 million net paid subscribers in the quarter exceeded the consensus of 4 million. Wedbush said Netflix’s results for the quarter were “solid,” with revenue topping consensus, guidance and the firm’s estimate. Wedbush boosted its price target on Netflix to $800 from $775 and maintained its outperform rating. Netflix shares advanced more than 10% in recent Friday trading.

Netflix’s ad-supported tier is growing at a healthy clip, leaving management to expect ad revenue to double in 2025 while still not a primary driver of overall growth, say analysts at UBS in a research note. The streaming giant saw a higher percentage of sign-ups opting for its ad tier in 3Q than in 2Q, say the analysts, and management expects to reach a critical scale across ad markets next year. Other takeaways the analysts note from Netflix executives include their suggestion that revenue growth in 2025 will be driven more by members than average revenue per member driven. “We believe the company could lean into monetization efforts with price/hour of consumption at the low end of peers and the content pipeline gaining steam,” say the analysts. Shares rise 11%, making it the best performer in the S&P 500 and Nasdaq 100.

Netflix stock was downgraded by one analyst and upgraded by another on Monday, 10 days before the streaming company reports third-quarter earnings. Netflix stock has gained 48% this year, and that increase has helped push its valuation higher. Shares are now trading at 32.6 times the earnings expected over the next 12 months, which is higher than the S&P 500’s 21.7 times. Barclays analyst Kannan Venkateshwar wrote in a research note on Monday that the stock’s valuation is based on the assumption that Netflix’s revenue growth will remain in the low double digits for the foreseeable future. “Even if the company gets to its revenue growth goal, valuation is implicitly pricing in more than a doubling of sub [subscriber] base from present levels,” Venkateshwar wrote. He downgraded shares to Underweight from Equal Weight while maintaining a target of $550 for the price. Netflix introduced major changes to its business model

Netflix’s upcoming earnings should come with strong net subscriber additions and monetization initiatives, KeyBanc Capital Markets analysts say in a research note. The streaming giant is priced at a $1 a month premium to competitors following recent U.S. price increases from Max, Peacock and Paramount+, meaning the likelihood of a price increase has improved. Netflix will not likely guide for quantitative net additions, but could raise its annual revenue growth outlook to 14% to 16% from 13% to 15% previously given its first-half net addition momentum, the analysts say. Shares fall 0.4% to $682.79.

We lift our target to $725 from $640 on a forward TEV/EBITDA of 26.3x our 2025 EBITDA estimate at $28.14/share, a premium to the peer average at 23.0x and below NFLX’s three-year average at 31.6x. We keep our EPS views at $18.55 (consensus $18.31) in 2024 and $21.95 ($22.02) in 2025; our respective revenue estimates are $38.6B and $43.2B. Back in mid-April, NFLX surprised investors by disclosing it will remove subscriber data starting in Q1 2025, as it says the business is broader with other revenue streams. We still believe investors and advertisers want to know the subscriber base, net adds, and average revenue per user or subscriber (ARPU) by total/regions. In Q1 2024, NFLX added 9.33M net subscribers, ending with 269.6M total subscribers. Monthly ARPU varied by region with UCAN at $17.30 ($16.18 a year ago), EMEA at $10.92 ($10.89), LATAM at $8.29 ($8.60), and APAC ex-China at $7.35

Netflix (NFLX) has a “virtually insurmountable lead in the streaming wars” and it’s now positioning itself to increase advertising revenue, Wedbush said Monday in a note to clients. The streaming giant’s rivals will likely “continue to flail while trying to replicate Netflix’s business model,” said Wedbush analysts including Alicia Reese. Meanwhile, the company’s “advertising tier should reap benefits for several years,” the analysts said. “The biggest benefit of the ad tier so far is that it limits churn,” the note said. “Netflix is positioning to accelerate ad tier revenue contribution into year-end and 2025 as it improves its advertising solutions and targeting, expands partnerships, and adds more live events.” The company has “reached the right formula with global content creation, balancing costs, and increasing profitability,” the analysts said, adding the company will likely “continue to expand profitability and generate increasing free cash flow.” Catalysts for the company include the “full

Netflix’s (NFLX) new deal with the National Football League to air at least one game on Christmas Day over three years is a “positive read” for the sports rights marketplace, UBS Securities said in a note. “Along with the recent WWE deal, we believe the addition of NFL rights provide another lever to drive engagement, enhance pricing power and scale the company’s ad business,” according to the note Wednesday. UBS said the deal, which it said is Netflix’s biggest in securing tier 1 sports rights, highlights Netflix’s “growing ambitions” in sports. “We believe efforts to take sports [direct-to-consumer] will sustain demand for rights, helping offset the worsening economics from buyers in traditional TV,” the firm said. The deal starts with two games scheduled for Christmas Day in 2024, the company announced earlier. UBS maintained its buy rating and $685 price target on the stock.

Netflix’s first-quarter earnings positively surprised the markets with a sharp growth in subscriptions, Swissquote Bank senior analyst Ipek Ozkardeskaya says in a note. The streaming-service platform added more than 9 million new viewers and reported its best start to a year since the pandemic, the analyst highlights. Its performance was boosted by the ban on password-sharing, after Netflix estimated around 100 million people were using an account without paying for it, Ozkardeskaya says. However, comments on its 2Q revenue outlook fail to impress, along with investors’ disappointment regarding Netflix’s decision to stop reporting quarterly subscribers next year, the analyst adds. Shares in premarket trading are down 6.4% at $571.35.

Netflix (NFLX) continues to lead its competitors in the streaming content sector and has made the right decisions to evolve from a high-growth, low-profit business to a slow-growth, high-profit business, Wedbush said in a note on Friday. “We think Netflix has reached the right formula with global content creation, balancing costs, and increasing profitability,” Wedbush said. “We think Netflix will continue to expand profitability and generate increasing free cash flow.” Wedbush maintained its outperform rating and $725 price target, citing the company’s advertising potential for WWE next year, game expansion, product licensing, and growth in viewership. “We think Netflix can meet expectations for EPS to more than double between 2023 and 2026,” Wedbush said. Another dimension of Netflix’s evolution is the decision to stop reporting quarterly subscriber numbers and instead focus on regional revenue. “The company is unlikely to be challenged by competitors, and we think it has already ‘won’

Netflix’s planned shift away from quarterly membership numbers is a material change but giving major subscriber milestones “will be enough for long-term investors to continue to monitor the metric,” says New Street Research’s Dan Salmon in a note. Netflix, which will shift its approach starting in 1Q25, will add annual revenue guidance to offset the lost quarterly visibility. Salmon notes he’s eager to see what milestones get announced and estimates 15 million paid net additions in 2025, which will taper down to a little under 10 million in 2030. Shares decline 6.8% to $569 in premarket trading following softer-than-expected revenue outlook for the current quarter.