Netflix Stock Soars on Strong Q4 Earnings, Analyst Optimism
NFLX +11.00%
Netflix stock (NFLX) surged to a new all-time high on Wednesday, reaching $1,000 per share. The surge followed strong Q4 earnings, which beat expectations across the board.
Highlights from Earnings Report:
* Subscriber Growth: Netflix reported a staggering 18.9 million new users in Q4, its largest quarterly subscriber gain ever.
* Revenue and Earnings: Revenue hit $10.25 billion, exceeding estimates of $10.11 billion, while earnings per share (EPS) came in at $4.27, outpacing consensus of $4.18.
* Stock Buyback and Revenue Outlook: Netflix announced a $15 billion stock buyback and raised its full-year revenue target to $43.5-$44.5 billion.
Analyst Praise:
Wall Street analysts were highly optimistic about the results. Pivotal Research raised its price target to $1,250, the highest on the Street. Jefferies analyst James Heaney said the Q4 results were "near flawless."
Advertising and Price Hikes:
Netflix revealed that advertising revenue doubled in 2024 and is expected to double again in 2025. The company also increased prices for its ad-supported, standard, and premium plans.
Live Events Boom:
Netflix co-CEO Greg Peters emphasized that live events did not drive the subscriber surge. However, he noted that NFL games and the "Jake Paul vs. Mike Tyson" boxing match attracted significant viewership.
Profitability Metrics:
Operating margins reached 22.2% in Q4 and 27% for 2024. Netflix expects Q1 operating margins to expand to 28.2%.
Competitive Landscape:
Netflix acknowledged the intense competition in the streaming industry but highlighted its focus on product development and investment to maintain its market position.