Netflix stock ( NFLX ) surged to another all-time high as Wall Street analysts praised the company’s fourth-quarter earnings results.
Shortly after the opening bell, the stock jumped below $1,000 as analysts rushed to raise their own price targets. Pivotal Research raised its price target to $1,250 a share from $1,000 — the highest on the street.
Streaming giant It reported 18.9 million users Revenue and earnings in the fourth quarter also beat expectations. It was the largest quarterly subscriber gain in the company’s history.
“Q4 results were flawless,” Jefferies analyst James Heaney said in a note following the report.
Including Wednesday’s price action, Netflix stock is up nearly 100% on the year. Shares hit multiple all-time highs in 2024, with many analysts calling Netflix the winner of the hard-fought streaming wars.
The company announced a $15 billion share buyback and raised its full-year earnings outlook in a report Tuesday afternoon. Netflix now projects 2025 revenue of $43.5 billion to $44.5 billion, up from $43 billion to $44 billion previously.
Strong subscriber gains come when the stream returns in 2024 with two back-to-back NFL games, a successful “Jake Paul vs. Mike Tyson” boxing match and the “Squid Game.” To that end, the company said the price hike would hit the service — something analysts had been teasing going into press.
The company has raised its ad-supported plan from $6.99 to $7.99. Its regular, ad-free tier is now $17.99, up from $15.49, while its premium plan will increase by $2 to $24.99. Users who want to add an additional member will now pay $8.99, a $1 increase.
Wall Street had expected the streaming service to report just 9.18 million subscribers in Q4 2023 after confirming 13.12 million paid users.
“With subs no longer forthcoming, investor attention will shift to Netflix’s ability to monetize its members, and advertising and price increases will help answer that,” Macquarie analyst Tim Nolen said on Wednesday.
The company has announced that ad revenue will double by 2024 and management will double it again by 2025. Even so, advertising revenue is not expected to become a major revenue driver until 2026.
On the earnings call, Netflix co-CEO Greg Peters said the big jump in subscribers was not driven by a single event, despite the recent push for live sports programming.
“We’ve consistently seen throughout our history that no single topic drives the majority of our acquisitions or engagement,” Peters said, noting that live events captured fewer new customers in the quarter.
Analysts were encouraged by this comment, as Deutsche Bank’s Brian Kraft wrote to clients: “Management was very clear that the strength in 4Q net adds was not disproportionate to the Tyson and Paul fight, the NFL or any other headline.” Don’t see the strength as a reason not to continue.
Similarly, NFL games An average of 30 million viewers. According to Netflix, it was the most-watched Christmas Day in the United States. The company continues to double down on sports Latest WWE Raw. Rumor They also turned The company could bid on the UFC rights next.
Netflix said in its shareholder letter that it is not focused on the rights to “large regular sports packages”, but rather on providing special events programs that our live strategy cannot miss.
Revenue came in at $10.25 billion in Q4, beating the Bloomberg consensus estimate of $10.11 billion and representing a 16 percent year-over-year increase. Netflix guided first-quarter revenue to $10.42 billion, which missed consensus estimates of $10.48 billion.
Diluted earnings per share (EPS) beat estimates for the quarter, with the company reporting EPS of $4.27, above the consensus estimate of $4.18 and ahead of the $2.11 EPS figure reported a year ago. Netflix guided fourth-quarter EPS to $5.58, below consensus calls for $6.01.
Jan 20, 2022 In the example above, the Netflix logo appears on the TV remote control. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo ·REUTERS / Reuters
Other profitability metrics also came in strong, with operating margins set at 22.2% in the fourth quarter and 27% for the full year 2024. Netflix expects Q1 operating margins to expand to 28.2%.
Analysts had expected operating margins to reach 22% in Q4 before jumping to 30% in the current quarter.
“Our business is highly competitive with many formidable competitors in traditional entertainment and big technology,” Netflix said in the letter. “We are fortunate that we don’t have distractions such as shrinking linear networks, and with our focus and continued investment, we have a good and improving product/market fit around the world.”
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Alexandra Boy He is a senior reporter at Yahoo Finance. Follow her with X. @allie_canal, LinkedIn, And email me at alexandra.canal@yahoofinance.com.
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