Netflix is back on the rise! The streaming giant’s stock has climbed another 3% today, continuing its recovery from a major correction in 2022. Wall Street analysts are feeling bullish about the company’s future, citing positive early signs from a new password sharing plan and the potential for advertising. In fact, several analysts have increased their 12-month price targets, including Guggenheim and Bank of America, who both made sizable upticks today. Pivotal Research even set their target at a whopping $535, the highest on the Street! With its world-class brand, leading global subscriber base, and innovative approach, Netflix is poised to outperform.
Shares in Netflix are currently trading at around $435, the highest they’ve been since January 2022. When the company reported softer-than-expected results last year, along with a loss of subscribers, its stock plummeted 60% and wiped out billions of dollars in market value. But Netflix has remained in pole position with 232.5 million global subscribers, and its decision to pursue advertising and charge for password sharing is expected to generate billions in additional annual revenue.
Guggenheim’s Michael Morris emphasized that the new password-sharing policy “is not driving a sustained increase in member churn,” and he believes that Netflix’s position as the global leader in high-quality, long-form streaming video will drive further financial upside through higher subscription ARPU, advertising revenue, and margin expansion. Ehrlich, who is known for keeping a close eye on the advertising sector, said the new charge for password sharing is “inextricably linked” with last November’s debut of a cheaper, ad-supported subscription tier.
Pivotal’s Jeffrey Wlodarczak even implied that Netflix has developed a degree of immunity to macroeconomic conditions, saying that the company “remains well positioned to generate solid subscriber and revenue/free cash flow growth even in a potential global recessionary environment via their better monetization of the approximately 100+ million households that currently utilize Netflix outside of paying households via password sharing.”
All in all, it’s an exciting time for Netflix and its investors. With its innovative approach and strong subscriber base, the streaming giant is poised for continued success.
