In a recent turn of events, Netflix stocks witnessed a significant 16% leap this Thursday, driven by an impressive quarterly earnings analysis.
One of the standout statistics was a massive 70% increase in the platform’s ad-supported membership tier. This rise further emphasizes the company’s dynamic shift and acceptance by a broader audience.
Regarding overall membership growth, Netflix’s third quarter saw the addition of 8.76 million subscribers. This number overshadows Wall Street’s prediction of 5.49 million. Interestingly, this surge mirrors the expansion during Q2 of 2020 – a period marked by global lockdowns and a binge-watching spree.
After a slight stumble in April 2022, when Netflix experienced its inaugural net subscriber loss in a decade, this recent development signals a strong revival. This rebound dissolved concerns of market saturation and has been lauded by several industry analysts.
Morgan Stanley, reacting positively, updated Netflix’s stock status to “overweight” and raised its financial forecast to a promising $475. Their statement emphasized, “We anticipate that Netflix will not only meet but surpass its previously set benchmarks. The goals include achieving double-digit revenue growth and enhancing profit margins.”
Adding to the wave of optimism, Matthew Thornton from Truist shared his perspective. He cited potential growth driven by measures against password sharing and emphasized the significance of their advertising strategies. The firm also adjusted Netflix’s rating to a “buy” status, increasing its price projection from $430 to $465. Thornton elaborated, “Our decision to upgrade hinges on the expected benefits from ongoing password-sharing interventions, long-term ad strategies, and a $10 billion share buyback. Not to forget, by 2025, major attractions will include shows like ‘Squid Game’, ‘Wednesday’, and ‘Stranger Things’. Moreover, ventures into video gaming offer additional growth avenues for Netflix.”
