Netflix stock (NFLX:) hit another all-time high, rising as much as 13.6% in early trading Wednesday, as Wall Street analysts praised the company’s fourth-quarter earnings results.
The stock jumped to just under $1,000 a share shortly after the opening bell as analysts rushed to raise their respective price targets.Pivotal Research raised its target to $1,250 a share from $1,000.
The streaming giant reported a whopping 18.9 million users in the fourth quarter, while revenue and earnings also beat expectations. It was the largest quarterly subscription revenue in the company’s history.
“Fourth quarter results were almost flawless,” Jefferies analyst James Heaney said in a note following the report.
The company also announced a $15 billion share buyback and boosted its full-year revenue forecast in its after-hours report on Tuesday.Netflix now projects 2025 revenue in the range of $43.5 billion to $44.5 billion, up from the previous estimate of $43 billion to $44 billion. from the dollar range.
The big subscriber gains come as the broadcast ended 2024 with two back-to-back NFL games, the successful Jake Paul vs. Mike Tyson boxing match and the return of the Squid Game will deliver to the service, which analysts have consistently derided in print.
The company has raised the price of its ad-supported plan from $6.99 to $7.99. Its standard, ad-free tier will now be $17.99, up from $15.49, while its Premium plan will increase by $2 to $24.99. : Users who want to add an additional member will now pay $8.99, an increase of $1.
Wall Street had expected the streaming giant to report just 9.18 million subscribers after securing 13.12 million paying users in Q4 2023. The company announced last spring. it will stop reporting the measurement earlier this year.
“If left unscathed, investors’ focus is shifting to Netflix’s ability to monetize its member base, with advertising and price increases helping to answer that,” Macquarie analyst Tim Nolen said on Wednesday.
The company found that ad revenue doubled in 2024, and management has guided for it to double in 2025. However, ad revenue is not expected to become a major revenue driver until 2026.
Speaking on earnings, Netflix co-CEO Greg Peters said the big increase in subscribers wasn’t due to one specific event, although the latter live sports programming push.
“Throughout our history, we’ve consistently seen that no one title really drives the majority of our acquisition or engagement,” Peters said, noting that live events account for a minority of new customers per quarter.
Analysts were greatly cheered by this comment from Deutsche Bank’s Brian Kraft, who wrote to clients: “Management was very clear that the strength of 4Q net additions was not disproportionately driven by the Tyson-Paul fight, the NFL, or any other title, so we see no reason why the strength should not continue.”
Netflix said in its shareholder letter that it is not focused on “rights to big regular season sports packages, rather our live strategy is focused on skippable, special event programming.”
Revenue came in at $10.25 billion in the fourth quarter, beating the Bloomberg consensus estimate of $10.11 billion and up 16 percent from the same period last year.Netflix’s first-quarter revenue was $10.42 billion , missing consensus estimates of $10.48 billion.
Diluted earnings per share (EPS) also beat estimates for the quarter, with the company reporting EPS of $4.27, beating the consensus estimate of $4.18 and significantly beating the $2.11 EPS it reported in the prior period. : Netflix guided for fourth-quarter EPS of $5.58, below consensus for $6.01.
The Netflix logo is seen on a TV remote control in this picture taken on January 20, 2022. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo ·Reuters
Other profitability indicators have also been strong. operating margins were 22.2% in the fourth quarter and 27% for the full year 2024. Netflix expects 1Q operating margin to increase to 28.2%.
Analysts had expected operating margins to hit 22% in 4Q before jumping to 30% in the current quarter.
“Our business remains intensely competitive with many formidable competitors in traditional entertainment and big tech,” Netflix said in the letter. we have good and improving product/market fit globally.”
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Alexandra Canal is a senior reporter at Yahoo Finance Follow him with an X @allie_canal:, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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