Netflix Surges to All-Time High as Q4 Earnings Beat Expectations

NFLX

Wall Street Praises Netflix's Record-Breaking Subscriber Growth

Netflix (NFLX) closed at an all-time high on Wednesday, fueled by a surge in its stock price of nearly 10%. The company's exceptional fourth-quarter earnings results have impressed Wall Street analysts.

Exceptional Subscriber Growth

Netflix reported a record-breaking 18.9 million new subscribers in Q4, far exceeding analysts' expectations of 9.18 million. This represents the largest quarterly subscriber increase in the company's history.

Strong Revenue and Earnings

Revenue for the quarter hit $10.25 billion, surpassing consensus estimates of $10.11 billion. Diluted earnings per share (EPS) also exceeded expectations, coming in at $4.27 compared to the expected $4.18.

Analyst Optimism

Analysts praised Netflix's performance, with Jefferies analyst James Heaney calling the results "near flawless." Jefferies has increased its price target for NFLX to $1,250, the highest on Wall Street.

Strong Outlook

Netflix boosted its full-year revenue outlook to between $43.5 billion and $44.5 billion, exceeding the previous range of $43 billion to $44 billion.

Price Hikes and Advertising Growth

The company announced price increases for its subscription plans and reported strong growth in its advertising revenue, which doubled in 2024 and is expected to double again in 2025.

Live Events Boom

Netflix's live events, including NFL games and the Jake Paul vs. Mike Tyson boxing match, contributed to the subscriber growth.

Competition and Focus

Despite intense competition, Netflix emphasized its focus on delivering "can't-miss, special event programming" in its live events strategy.

Financial Metrics

Operating margins remained strong at 22.2% in Q4 and 27% for the full year 2024. Netflix expects Q1 operating margins to expand to 28.2%.

Conclusion

Netflix's Q4 earnings report and subsequent stock surge demonstrate the company's continued strength in the streaming wars. Wall Street analysts remain optimistic about Netflix's future growth prospects.