Netflix shares hit record high as Wall Street cheers ‘nearly flawless’ earnings

On By Littum

Shares of Netflix ( NFLX ) soared to another record high, rising as much as 13.6% in early trading Wednesday, as Wall Street analysts praised the company’s fourth-quarter earnings results.

Shortly after the opening bell, the stock jumped to just under $1,000 a share. stock as analysts rushed to increase their respective price targets. Pivotal Research raised its target from $1,000 per share to $1,250 — the highest on the Street.

The streaming giant reported a whopping 18.9 million users in the fourth quarter, while revenue and earnings also nicely beat expectations. It was the largest quarterly subscriber growth in the company’s history.

“Q4 results were almost flawless,” Jefferies analyst James Heaney said in a note after the report.

Including Wednesday’s price action, Netflix shares are up around 100% year over year. Shares hit several record highs in 2024 as many analysts call Netflix the winner of the hard-fought streaming wars.

The company also announced a $15 billion share buyback and raised its full-year revenue guidance in its after-hours report on Tuesday. Netflix now expects 2025 revenue of between $43.5 billion and $44.5 billion, ahead of the previous $43 billion to $44 billion range.

The strong subscriber gains come as the streamer finished 2024 with two back-to-back NFL games, a successful “Jake Paul vs. Mike Tyson” boxing match and the return of the “Squid Game.” To that end, the company said price increases will hit the service — which analysts had consistently teased going into print.

The company raised the price of its ad-supported plan to $7.99 from $6.99 previously. Its standard, ad-free tier will now be $17.99, up from $15.49, while its Premium plan will increase by $2 to $24.99. Users who want to add an additional member will now pay $8.99, an increase of $1.

Wall Street had expected the streaming giant to report just 9.18 million subscribers after it secured 13.12 million paying users in the fourth quarter of 2023. The company announced last spring that it would stop reporting the metric at the start of ​​this year.

“Without more underreporting to come, investor focus is shifting to Netflix’s ability to monetize its member base; advertising and price increases will help answer this,” Macquarie analyst Tim Nollen said on Wednesday.

The company revealed that ad revenue doubled in 2024, and management guided for it to double again in 2025. Still, ad revenue isn’t expected to become a primary revenue driver until 2026.

On the earnings call, Netflix co-CEO Greg Peters said the huge jump in subscribers wasn’t driven by a particular event, despite its recent live sports programming.