Netflix (NFLX) stock scored a flurry of price-target hikes after the internet television network crushed Wall Street’s estimates for new subscribers in the fourth quarter. Shares rocketed to a record high on the news.
Late Tuesday, Netflix said it added 18.91 million subscribers in Q4, ending 2024 with 301.63 million subscribers worldwide. Wall Street had modeled for 10.18 million net new subscribers.
↑ X NOW PLAYING These Indicators Show When A Stock Is About To Change Character The Los Gatos, Calif.-based company earned $4.27 a share, up 102% year over year, on sales of $10.25 billion, up 16%, in the December quarter. Analysts polled by FactSet had expected earnings of $4.21 a share on sales of $10.11 billion.
For 2025, Netflix is forecasting revenue growth of 13% to $44 billion, based on the midpoint of its guidance. Analysts were looking for $43.6 billion.
On the stock market today, Netflix stock hurtled more than 12% to 982.69 in early trades.
With the move, it was set to break out from a flat base with a buy point of 941.75, according to IBD MarketSurge charts. That buy point is also the stock’s previous all-time high, reached on Dec. 11.
At least two dozen Wall Street analysts raised their price targets or ratings on Netflix stock after the company’s winning fourth-quarter report.
Netflix Stock Upgraded To Buy
Rosenblatt Securities analyst Barton Crockett upgraded Netflix stock to buy from neutral and more than doubled his price target to 1,494 from 680.
“Netflix delivered on so many levels in Q4 2024 that the equity needs to be rethought,” Crockett said in a client note. “The 2025 outlook now looks beatable, with ads ramping and pricing rising while engagement re-inflects thanks to broad content strengths.”
Popular content for Netflix in the fourth quarter included new seasons of “Outer Banks,” “Squid Game,” “The Diplomat” and “The Lincoln Lawyer.” Other hit shows included new series “Black Doves” and movie “Carry-On.”
Subscription Price Increases
Netflix also announced that it is raising subscription pricing across several markets, including the U.S. The ad-supported plan will now cost $7.99 a month from $6.99. The standard ad-free tier is increasing to $17.99 from $15.49. And the premium ad-free plan, which enables four concurrent streams, is increasing to $24.99 monthly from $22.99.
“Netflix and Chill becomes Netflix and Bill,” Phillip Swann, editor of TVAnswerman.com, said in a post on X.
Netflix Co-Chief Executive Ted Sarandos defended the price increases on a conference call with analysts Tuesday. He said the price increases fund great new content in movies, TV series and live programming.
“When you’re going to ask for a price increase, you better make sure you have the goods and the engagement to back it up. And I feel like what we have going into 2025 is just that,” Sarandos said. “The strength of slate has never been better.”
The year ahead will bring new seasons of “Stranger Things,” “Wednesday,” “Squid Game,” “The Night Agent” and “Alice in Borderland.”
Netflix’s 2025 movie slate includes “Wake Up Dead Man: A Knives Out” starring Daniel Craig, “The Electric State” from the Russo Brothers, “Happy Gilmore 2” starring Adam Sandler, “Kinda Pregnant” starring Amy Schumer and “RIP” with Ben Affleck and Matt Damon, among others.
Wedbush Securities analyst Alicia Reese reiterated her outperform rating on Netflix stock and raised her price target to 1,150 from 950.
“Netflix has established a virtually insurmountable lead in the streaming wars,” she said in a client note. “With $18 billion in content spend across movies, high-demand serial content, games, and live events, there is meaningful upside potential to Netflix’s 2025 guidance.”
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
YOU MAY ALSO LIKE:
SoundHound Makes Tempting Offer To Carmakers. AI Stock Surges.
Why Apple Stock Got Hit By Downgrades, Price-Target Cuts
See Stocks On The List Of Leaders Near A Buy Point
Find Winning Stocks With MarketSurge Pattern Recognition & Custom Screens
Join IBD Live For Stock Ideas Each Morning Before The Open
