Shares of Netflix (NFLX) surged in pre-market trading after the streaming giant added a record 18.9 million new subscribers in the fourth quarter of 2024. Looking ahead, the company now expects its revenues in FY25 to range between $43.5 billion and $44.5 billion, $0.5 billion higher than its prior forecast. This reflects improved business fundamentals and increased advertising revenue. Furthermore, in the first quarter, the company projected revenues of $10.4 billion, compared to consensus estimates of $10.5 billion.
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Additionally, the company expects operating margins to rise to 29% in FY25, up from 27% in 2024. With these adjustments, Netflix plans to continue expanding its content slate and maintain a strong subscriber base, all while maintaining a competitive edge in a rapidly growing market.
NFLX Sees Strength across Different Types of Content
Despite challenges such as the Los Angeles fires, Netflix has seen broad strength across all content types and regions in the fourth quarter. Notably, no single title, including live events, dominated the acquisition of new users. While live events like the Jake Paul-Mike Tyson fight and NFL games contributed to new subscribers, they represented a small portion of the overall growth.
The company stated in its letter to shareholders that while live sports are a part of Netflix’s broader live events strategy, they are not its sole focus. Furthermore, NFLX added that securing full season “big league” sports rights remains a challenging pursuit.
NFLX Announces Stock Buyback
In FY24, the company repurchased 9.9 million shares for $6.2 billion. Additionally, NFLX announced an incremental stock buyback program worth $15 billion which brings its total buyback authorization to $17.1 billion.
JP Morgan Analyst Raises NFLX’s Price Target
Following the blockbuster earnings, many Wall Street analysts bumped up their price targets on the stock. Top-rated JP Morgan analyst Doug Anmuth also raised his price target to $1,150 from $1,000 while reiterating a Buy on the stock.
The analyst highlighted Netflix’s strong Q4 results, including nearly 19 million new subscribers and an upgraded 2025 revenue and margin outlook, as key drivers. According to Anmuth, Netflix is “firing on all cylinders,” supported by a robust content slate, rising engagement, healthy retention, and price hikes in key markets, effectively addressing concerns about high expectations and currency headwinds.
Is NFLX Stock a Good Buy?
Analysts remain cautiously optimistic about NFLX stock, with a Moderate Buy consensus rating based on 20 Buys, seven Holds, and two Sells. Over the past year, NFLX has soared by more than 70%, and the average NFLX price target of $986.46 implies an upside potential of 13.4% from current levels.
