Streaming giant Netflix (NFLX) won a new Street-High price target from Pivotal Research analyst Jeffrey Wlodarczak on record Q4 earnings. The analyst lifted the price target on NFLX to $1,250 from $1,100, implying a healthy 43.7% upside potential from current levels. Wlodarczak retained a Buy rating on Netflix stock. Netflix shares soared over 14% in extended trading yesterday, after the company announced 18.9 million subscriber additions in the fourth quarter of Fiscal 2024.
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Highlights of Netflix’s Q4 FY24 Results
- Global Streaming Paid Net Additions – 18.91 million versus 9.5 million consensus
- Revenue Growth – 16% compared to the consensus growth estimate of 14.5%
- Free Cash Flow – $1.38 billion versus $1.0 billion consensus
Wlodarczak’s Views on Netflix’s Performance
Wlodarczak acknowledged that Netflix reported better-than-anticipated revenue growth, EBITDA (earnings before interest, tax, depreciation, and amortization) figures, and free cash flow. Additionally, Netflix raised its revenue for Fiscal 2025 to $44.5 billion and operating margin guidance to 29% from 28%. Following the solid results, the analyst also increased his forecasts for subscribers, revenue, operating margin, free cash flows, and the target terminal EBITDA (2030) multiple in his DCF (discounted cash flow) valuation methodology to 20x from 18x.
Overall, the analyst believes that Netflix offers a very solid “price to entertainment value,” backed by the ad-supported subscription offering, which is helping the company to continually add subscribers and ARPU (average revenue per user) compared to peers. The analyst thinks that Netflix must continue to add more engaging content and live sports streaming to its slate to attract more viewers.
What Are Other Analysts Saying About Netflix Stock?
TD Cowen increased the price target to $1,150 from $1,000, citing a revenue jump in Q1FY25 to $10.5 billion, backed by an expected 5.9 million global paid net adds. The analyst also increased his revenue and global paid net add estimates for 2025.
Canaccord Genuity analyst upgraded NFLX stock to Buy from Hold and lifted the price target to $1,150 (32.2% upside) from $940. Similarly, Oppenheimer and Piper Sandler analysts also boosted their price target to $1,150 and $1,100, respectively. On the other hand, Raymond James stuck to its Hold rating on NFLX without giving a price target.
Is NFLX a Good Buy?
Despite Netflix’s beat-and-raise results, analysts gave mixed views on the stock. On TipRanks, NFLX stock has a Moderate Buy consensus rating based on 20 Buys, seven Holds, and two Sell ratings. The average Netflix stock price target of $986.46 implies 13.4% upside potential from current levels. In the past year, NFLX shares gained 79.1%.
