Netflix Stock Surges to All-Time High on Q4 Earnings Beat
Netflix (NFLX) stock closed at $954.08 on Wednesday, a 9.69% gain and an all-time high. The rally was driven by strong fourth-quarter earnings results that exceeded expectations.
Subscriber Growth and Revenue Surpass Estimates
Netflix reported an impressive 18.9 million net subscriber additions in Q4, significantly higher than the expected 9.18 million. Revenue also surpassed expectations, reaching $10.25 billion, a 16% increase year-over-year.
Price Hikes and Advertising Growth
The company announced price increases for its ad-supported and ad-free plans, with the Standard plan now costing $17.99 and the Premium plan increasing to $24.99. Netflix also revealed that its advertising revenue doubled in 2024 and predicted similar growth in 2025.
Live Events Drive Viewership
While Netflix emphasized that live events did not account for a majority of subscriber gains, the company's recent NFL games and the Jake Paul vs. Mike Tyson boxing match drew large audiences.
Strong Operating Margins
Operating margins for Q4 reached 22.2% and 27% for full-year 2024, exceeding analyst estimates. Netflix projects Q1 operating margins to expand to 28.2%.
Analysts Praise Results and Boost Price Targets
Wall Street analysts lauded Netflix's performance. Pivotal Research increased its price target to $1,250, the highest on the Street. Jefferies analyst James Heaney described the Q4 results as "near flawless."
Future Outlook and Competition
Netflix projected 2025 revenue between $43.5 billion and $44.5 billion. The company acknowledged the competitive landscape but emphasized its focus on monetizing its subscriber base through advertising and price adjustments.