Netflix shares increase in subscribers, fueling growth of live sports streaming
(Reuters) – Shares of Netflix rose in premarket trading on Wednesday.
The streamer’s stock rose more than 14 percent to $994.36, poised to increase its market capitalization by $53 billion to $425 billion if the gains hold.
In the year 2024 was a milestone for Netflix in its foray into live sports. It has partnered with WWE to broadcast two NFL games on Christmas Day and secured US broadcast rights for the 2027 and 2031 FIFA Women’s World Cups.
“Netflix is running away in the streaming market thanks to strong performance, a stellar content slate and economies of scale,” Evercore ISI analysts said in a note.
The company added 18.9 million subscribers in the holiday quarter, beating Wall Street’s estimate of 9.2 million quarterly additions and up from the 13.1 million it posted a year ago, LSEG data showed.
Its fourth-quarter revenue and profit also beat estimates, as Netflix’s efforts to shift investors from subscription growth to other performance metrics paid off.
Netflix’s deep investment in live events is attracting tens of millions of viewers. Morgan Stanley said Netflix’s “unmatched scale creates financial leverage to invest back into the business.”
At least nine analysts raised their price targets on the stock following the company’s quarterly results, bringing their average target to $970 from $922.50, according to data compiled by LSEG.
The stock’s 12-month forward price-to-earnings ratio stands at 35.43, compared to Walt Disney’s 19.19.
Netflix has announced price increases for most of its plans in the United States, Canada, Portugal and Argentina.
“As we head into a strong 2025 slate, we expect little push for price increases in the US and a few other markets,” JP Morgan analysts said.
In the year By 2024, Netflix’s stock is up 83 percent, Disney’s is up 23 percent, and Warner Bros.’s stock is down about 7 percent.
(Reporting by Joel Jose in Bengaluru and Lucy Raitano in London; Editing by Amanda Cooper and Shinjini Ganguly)
