Netflix Stock Surges to All-Time High on Strong Q4 Earnings
NFLX
+9.64%
Key Highlights:
* Revenue: $10.25 billion (beat estimates)
* Earnings per share (EPS): $4.27 (beat estimates)
* Net new subscribers: 18.9 million (record high)
* Price hikes: Ad-supported plan to $7.99, Standard plan to $17.99, Premium plan to $24.99
Wall Street Analysts Praise Results:
Analysts highly praised Netflix's Q4 performance, with many raising price targets and calling the company a "winner" in the streaming wars.
* Pivotal Research: $1,250 price target (highest on Wall Street)
* Jefferies: "Q4 results were near flawless"
Record Subscriber Growth:
Netflix reported a record 18.9 million net new subscribers in Q4, surpassing Wall Street expectations. The strong growth was attributed to the release of popular content such as "Squid Game" and live events like NFL games.
Advertising Revenue Soars:
Netflix's advertising revenue doubled in 2024 and is expected to double again in 2025. However, ad revenue is not expected to become a primary revenue driver until 2026.
Focus on Live Events:
Netflix is doubling down on live events, with recent successes including the "Jake Paul vs. Mike Tyson" boxing match and NFL games. The company plans to continue this strategy with the upcoming debut of WWE Raw.
Future Outlook:
Netflix projected 2025 revenue between $43.5 billion and $44.5 billion, slightly ahead of previous estimates. The company expects operating margins to expand to 28.2% in Q1.
Analyst Commentary:
* Macquarie: "Investor focus shifts to Netflix's ability to monetize its member base; advertising and price increases help answer this."
* Deutsche Bank: "The strength in 4Q net adds was not driven disproportionately by... any title; therefore, we see no reason why the strength will not continue."