Netflix Stock Rises Amidst Strong Financial Performance and Growth Projections

Analysts' Bullish Outlook on Netflix

Netflix (NFLX) stock climbed 2% on Wednesday following a series of positive analyses from Wall Street. Analysts are optimistic about the streaming giant's future growth trajectory. Morgan Stanley analyst Benjamin Swinburne projected a 30% upside based on current trading levels. In a client note, Swinburne stated that Netflix is "both a driver and beneficiary of industry disruption."

Key Factors Driving Netflix's Growth

Swinburne maintained his Outperform rating on the shares and outlined a bull case of $850, assuming over 30 million subscriber net additions this year. He highlighted revenue growth initiatives such as Netflix's advertising tier and its password-sharing crackdown. "Mid-teens revenue growth in 2025 likely requires significant scaling of its advertising business, but we believe it is putting the pieces in place to deliver on this opportunity," Swinburne noted.

Netflix reported that its ad tier has reached 40 million global monthly active users, a significant increase from 15 million users revealed in November and a 35 million increase from the previous year.

Expansion into Live Events and Sports

In addition to advertising, Netflix has expanded into live events and sports. The company secured streaming rights for two NFL games on Christmas Day as part of a three-season deal. Netflix also announced a 10-year agreement with WWE to bring its flagship program Raw to the streaming service beginning in 2025. A live wrestling event featuring Jake Paul and Mike Tyson is scheduled for July.

Shares of Netflix have risen approximately 35% since the start of the year. Swinburne attributes this growth to "its own strong operating execution rather than industry trends."

Continued Optimism from Wall Street

Evercore ISI analyst Mark Mahaney reiterated his Buy rating on Netflix shares and increased his price target by $50 to $700. Mahaney cited positive survey data and further potential from new and live content as reasons for the optimistic outlook.

"Netflix is in the strongest position financially, fundamentally, and competitively that we have ever seen," Mahaney wrote in a client note. He highlighted promising long-term revenue opportunities in live events and gaming, along with the upcoming release of "Squid Games II."

According to Evercore ISI's survey of 1,300 US Netflix users, churn intention slowed to its lowest level in two years, with only 35% of respondents indicating they are "extremely likely" or "very likely" to cancel their subscription within the next three months—a 3% quarter-over-quarter decline.

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