Evercore ISI notes that on Tuesday, Netflix (NFLX) provided a positive update on its ad business, disclosing 70M MAUs of its ad-supported plan as the company reached the second anniversary of the ad business launch. The firm believes Netflix’s current rate of MAU growth should at least support the company’s outlook to double Ad revenue in 2025. Evercore remains more focused on subscriber growth than ad revenue, per se, but views revenue diversification as a good thing, especially if it allows broader price points, which it thinks expands the value proposition and the TAM. The firm has an Outperform rating on the shares with a price target of $775.
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