Netflix (NFLX) secured a Buy rating from analyst Hamilton Faber at Redburn Atlantic, driven by the strong potential of the company’s advertising revenue. Faber reiterated his Buy rating on NFLX stock yesterday, predicting a 15% upside from the current level. He believes that Netflix has substantial growth opportunities with its underutilized ad inventory as the company strengthens its partnerships.
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Redburn Forecasts Robust Advertising Revenues for NFLX
Redburn forecasts that Netflix’s advertising revenue will grow from just 4% of its total revenue in 2024 to 20% by 2028, driving their more optimistic projections as compared to consensus estimates. Additionally, Redburn’s earnings forecasts for Netflix over the next four years are 1%, 4%, 9%, and 15% higher than the consensus.
Faber also sees volume growth as the key driver of expansion in the short term, especially in international markets, considering Netflix’s higher content spending.
Netflix Eyes Live Sports as Key to Score New Subscribers
Netflix gained a record 18.9 million new subscribers in Q4 2024, bringing its global paid memberships to 301.63 million, surpassing Wall Street’s expected 290.90 million. The company credited its strong performance to the success of live sports events and the return of hit TV shows like “Squid Game.”
Bernstein highlighted that the Tyson-Paul fight in November, which became the most-streamed sporting event in history, sparked a significant surge in new subscribers. Additionally, Netflix aired two live NFL games on Christmas Day in December, further boosting its U.S. ad revenues.
Looking forward, Bernstein suggests that Netflix has solidified its position as a credible platform for live events, potentially unlocking substantial growth in advertising revenues. Similarly, the company plans to stream more live sports this year, including a return of NFL games during Christmas. Netflix has also secured the U.S. broadcasting rights for the 2027 and 2031 FIFA Women’s World Cup.
Is NFLX a Good Buy?
On TipRanks, NFLX stock has a Moderate Buy consensus rating based on 28 Buys, 10 Holds, and one Sell rating. The average Netflix stock price target of $1,103.53 implies 11% upside potential from current levels.
In the last 12 months, NFLX shares gained 77%.
