Is Netflix Set for $1,100? A Closer Look at Its Recent Performance

Netflix (NASDAQ: NFLX) has recently captured investors' attention with its impressive Q4 2024 earnings report released on January 21. The company surpassed all expectations for subscriber growth, achieving a remarkable net addition of 18.9 million subscribers for the quarter. This figure significantly exceeds the analyst consensus of just 9.8 million, highlighting Netflix's strong market performance.

Subscriber growth was widespread across all regions, with at least 4 million new subscribers in each area. This global popularity indicates that Netflix continues to appeal to audiences worldwide.

The surge in subscribers can be attributed to Netflix's innovative content offerings, particularly its successful ventures into live events, which included the highly publicized Jake Paul vs. Mike Tyson fight and the streaming of two NFL games on Christmas Day. This strategy has helped the platform attract a diverse viewer base.

Moreover, the highly anticipated second season of Squid Game has received great reviews, and the company has noted an "improved product/market fit," suggesting that their content strategy is resonating well with audiences. Given these highlights, Wall Street has responded positively, with one investment firm upgrading its stock rating.

Wolfe Research's Upgrade

Wolfe Research has recently revised its recommendation for Netflix from "peer perform" to "outperform" and set an ambitious price target of $1,100 for the stock. This target reflects a potential upside of 15%, particularly following the stock's 10% rise immediately after the earnings announcement.

The firm argues that Netflix's scale is driving faster returns and expanding the market it can tap into. This assertion is backed by the backdrop of Netflix's recovery from a challenging period less than three years ago, when it suffered consecutive quarters of subscriber losses. Now, as the company experiences significant growth, its competitors in the legacy media space are grappling with their own challenges in retaining subscribers and maintaining profitability.

Is Now the Right Time to Buy Netflix?

As Netflix explores new revenue opportunities, such as advertising and live events, its business outlook appears stronger than ever, especially compared to its competition. The company also indicated a price increase for its subscription services, reflecting confidence in consumer demand while also enhancing its operational margins.

What once seemed like a mature, low-growth business has transformed back into a vigorous growth story. For investors considering their options, investing in Netflix now may prove to be a prudent decision.

Authors note: The author holds shares of Netflix. The article does not constitute financial advice and is for informational purposes only.

Netflix, Earnings, Stocks