Goldman Sachs Upgrades Netflix, Sees Strong Growth Ahead
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 27 2025
0mins
Should l Buy NFLX?
Source: CNBC
Netflix shares rose 3.00% and reached a 20-day high amid positive market conditions, with the Nasdaq-100 up 0.21% and S&P 500 up 0.09%.
Goldman Sachs upgraded Netflix's stock rating from Neutral to Buy and raised its price target from $100 to $120, reflecting strong market confidence in its content strategy and projected double-digit revenue growth driven by its advertising business. The firm anticipates Netflix will return 20% to 25% of its market cap to investors over the next five years, enhancing shareholder value.
This upgrade signals a positive outlook for Netflix as it focuses on content investment and shareholder returns, which could significantly improve its competitive position in the streaming market.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy NFLX?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on NFLX
Wall Street analysts forecast NFLX stock price to rise
38 Analyst Rating
27 Buy
10 Hold
1 Sell
Moderate Buy
Current: 98.820
Low
92.00
Averages
114.18
High
150.00
Current: 98.820
Low
92.00
Averages
114.18
High
150.00
About NFLX
Netflix, Inc. is a provider of entertainment services. The Company acquires, licenses and produces content, including original programming. It provides paid memberships in over 190 countries offering television (TV) series, films and games across a variety of genres and languages. It allows members to play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time. The Company offers members the ability to receive streaming content through a host of Internet-connected devices, including TVs, digital video players, TV set-top boxes and mobile devices. It is engaged in scaling its streaming service, such as introducing games and advertising on its service, as well as offering live programming. It is developing technology and utilizing third-party cloud computing, technology and other services. The Company is also engaged in scaling its own studio operations to produce original content.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Netflix Reports Record 2025 Earnings Ahead of Q1 2026 Results
- Strong User Growth: By the end of 2025, Netflix surpassed 325 million paying subscribers, significantly outpacing rivals HBO Max and Disney+, which each have around 131 million, solidifying its dominance in the streaming market and expected to continue attracting new users and increasing market share.
- Surge in Ad Revenue: In 2025, Netflix's advertising revenue reached $1.5 billion, growing over 150%, with expectations to double again in 2026; while the ad-supported subscription model generates lower initial revenue, the long-term value increases as the subscriber base expands.
- Impressive Financial Performance: Netflix anticipates first-quarter 2026 revenue of $12.2 billion, reflecting a 15.3% year-over-year growth, marking an acceleration in revenue growth, with projected earnings of $0.76 per share, the highest in company history, boosting investor confidence.
- Attractive Stock Valuation: With a current P/E ratio of 40.3, below the five-year average of 42.5, and projected earnings growth to $3.17 per share in 2026, Netflix's stock would need to rise 52% to maintain its current valuation, indicating strong potential returns for investors.
See More
Jeff Shell Resigns as President of Paramount Skydance Amid SEC Lawsuit
- Resignation Reason: Jeff Shell resigned from his position as President of Paramount Skydance due to a lawsuit alleging SEC violations, although the company stated that no SEC violations were found and labeled the claims as 'baseless'.
- Legal Action: Shell has opted to take 'forceful legal action' in response to the lawsuit, indicating his commitment to defending his reputation while also reflecting the company's supportive stance in this matter.
- Strategic Company Shift: Following Paramount's successful acquisition of Warner Bros. Discovery, Shell's future role remains undefined, particularly with the influx of new executives, which could impact the company's leadership structure and decision-making processes.
- Past Controversies: Shell previously resigned as CEO of NBCUniversal in 2023 due to an 'inappropriate relationship' with an employee, and this resignation further complicates his controversial image in the industry, potentially harming Paramount's brand reputation.
See More
Jeff Shell Leaves Paramount Presidency Amid SEC Lawsuit Allegations
- Executive Departure: Jeff Shell has stepped down as President of Paramount amid a lawsuit alleging SEC rule violations, although the company asserts that these claims are 'baseless'.
- Legal Action: Shell has opted to pursue 'forceful legal action' in response to the lawsuit, indicating his commitment to defending his reputation, which may also impact the company's governance structure.
- Acquisition Context: Following Paramount's successful acquisition of Warner Bros. Discovery in 2023, Shell's future role has become uncertain, particularly since he was not involved in the deal negotiations, potentially leading to a reshuffling of management.
- Past Controversies: Shell previously resigned as CEO of NBCUniversal in 2023 after admitting to an 'inappropriate relationship' with an employee, further intensifying scrutiny on his professional trajectory.
See More
Revolutionizing Investment Mindsets and Strategies
- Habits and Identity: David Gardner quotes James Clear, emphasizing that habits are pathways to identity change, suggesting that investors shape their self-perception through daily actions, thereby enhancing long-term investment success.
- Investing to Predict the Future: Kleiner Perkins' idea that “we invest to predict the future” highlights how investors become more observant of market dynamics when they hold stocks, improving their foresight of future trends.
- Market Uncertainty: By referencing Shakespeare, Gardner points out the “stubbornness of fortune” in investing, stressing the importance of long-term holding and regular investing to navigate the uncertainties brought by market fluctuations.
- Responsible Questioning: Gardner discusses Warren Berger's perspective, emphasizing that in an age of information overload, investors should question with curiosity rather than antagonism to improve the quality of their investment decisions.
See More
Identity and Habits of Investors Explored
- Identity and Habits: David Gardner emphasizes that habits are crucial in shaping identity, where every action serves as a vote for one's future self, enabling investors to gradually form their investment identity through consistent small habits, thereby enhancing long-term investment success.
- Investing and Observation: Gardner cites Kleiner Perkins' perspective that investing is not just about predicting the future but becoming a more astute observer through investment, paying attention to market changes and company dynamics to gain a competitive edge.
- Market Volatility Response: In the face of market fluctuations, Gardner advocates for a 'quiet and sweet style' through regular investing (like dollar-cost averaging), a strategy that helps investors remain calm amidst uncertainty and avoid emotional decision-making.
- The Art of Questioning: Gardner highlights the importance of questioning, encouraging investors to ask not just 'what should I buy' but 'why can this company succeed', thereby improving the quality of investment decisions through deeper inquiries.
See More
Netflix Acquisition Plans Halted, Stock Recovers
- Acquisition Plans Halted: Netflix's plan to acquire Warner Bros. Discovery for $82.7 billion was abandoned as Warner opted for Paramount's offer, leading to a recovery in Netflix's stock from a recent 42% decline, indicating renewed investor confidence in the company's future.
- Strong User Growth: By the end of 2025, Netflix had over 325 million paying subscribers, significantly outpacing rivals HBO Max and Disney+, demonstrating the effectiveness of its content spending strategy in attracting new members and solidifying its market dominance.
- Advertising Revenue Surge: Although advertising revenue accounted for only $1.5 billion of total revenue in 2025, it grew by over 150%, with expectations to double again in 2026, providing Netflix with additional funds for premium ad slots and enhancing its profitability.
- First Quarter Performance Expectations: Management anticipates first-quarter revenue for 2026 to reach $12.2 billion, reflecting a 15.3% year-over-year growth, which would mark the best quarterly performance in the company's history, showcasing Netflix's strong momentum in a competitive streaming market.
See More
Netflix Reports Record 2025 Earnings Ahead of Q1 2026 Results
- Strong User Growth: By the end of 2025, Netflix surpassed 325 million paying subscribers, significantly outpacing rivals HBO Max and Disney+, which each have around 131 million, solidifying its dominance in the streaming market and expected to continue attracting new users and increasing market share.
- Surge in Ad Revenue: In 2025, Netflix's advertising revenue reached $1.5 billion, growing over 150%, with expectations to double again in 2026; while the ad-supported subscription model generates lower initial revenue, the long-term value increases as the subscriber base expands.
- Impressive Financial Performance: Netflix anticipates first-quarter 2026 revenue of $12.2 billion, reflecting a 15.3% year-over-year growth, marking an acceleration in revenue growth, with projected earnings of $0.76 per share, the highest in company history, boosting investor confidence.
- Attractive Stock Valuation: With a current P/E ratio of 40.3, below the five-year average of 42.5, and projected earnings growth to $3.17 per share in 2026, Netflix's stock would need to rise 52% to maintain its current valuation, indicating strong potential returns for investors.
See More
Jeff Shell Resigns as President of Paramount Skydance Amid SEC Lawsuit
- Resignation Reason: Jeff Shell resigned from his position as President of Paramount Skydance due to a lawsuit alleging SEC violations, although the company stated that no SEC violations were found and labeled the claims as 'baseless'.
- Legal Action: Shell has opted to take 'forceful legal action' in response to the lawsuit, indicating his commitment to defending his reputation while also reflecting the company's supportive stance in this matter.
- Strategic Company Shift: Following Paramount's successful acquisition of Warner Bros. Discovery, Shell's future role remains undefined, particularly with the influx of new executives, which could impact the company's leadership structure and decision-making processes.
- Past Controversies: Shell previously resigned as CEO of NBCUniversal in 2023 due to an 'inappropriate relationship' with an employee, and this resignation further complicates his controversial image in the industry, potentially harming Paramount's brand reputation.
See More
Jeff Shell Leaves Paramount Presidency Amid SEC Lawsuit Allegations
- Executive Departure: Jeff Shell has stepped down as President of Paramount amid a lawsuit alleging SEC rule violations, although the company asserts that these claims are 'baseless'.
- Legal Action: Shell has opted to pursue 'forceful legal action' in response to the lawsuit, indicating his commitment to defending his reputation, which may also impact the company's governance structure.
- Acquisition Context: Following Paramount's successful acquisition of Warner Bros. Discovery in 2023, Shell's future role has become uncertain, particularly since he was not involved in the deal negotiations, potentially leading to a reshuffling of management.
- Past Controversies: Shell previously resigned as CEO of NBCUniversal in 2023 after admitting to an 'inappropriate relationship' with an employee, further intensifying scrutiny on his professional trajectory.
See More
Revolutionizing Investment Mindsets and Strategies
- Habits and Identity: David Gardner quotes James Clear, emphasizing that habits are pathways to identity change, suggesting that investors shape their self-perception through daily actions, thereby enhancing long-term investment success.
- Investing to Predict the Future: Kleiner Perkins' idea that “we invest to predict the future” highlights how investors become more observant of market dynamics when they hold stocks, improving their foresight of future trends.
- Market Uncertainty: By referencing Shakespeare, Gardner points out the “stubbornness of fortune” in investing, stressing the importance of long-term holding and regular investing to navigate the uncertainties brought by market fluctuations.
- Responsible Questioning: Gardner discusses Warren Berger's perspective, emphasizing that in an age of information overload, investors should question with curiosity rather than antagonism to improve the quality of their investment decisions.
See More
Identity and Habits of Investors Explored
- Identity and Habits: David Gardner emphasizes that habits are crucial in shaping identity, where every action serves as a vote for one's future self, enabling investors to gradually form their investment identity through consistent small habits, thereby enhancing long-term investment success.
- Investing and Observation: Gardner cites Kleiner Perkins' perspective that investing is not just about predicting the future but becoming a more astute observer through investment, paying attention to market changes and company dynamics to gain a competitive edge.
- Market Volatility Response: In the face of market fluctuations, Gardner advocates for a 'quiet and sweet style' through regular investing (like dollar-cost averaging), a strategy that helps investors remain calm amidst uncertainty and avoid emotional decision-making.
- The Art of Questioning: Gardner highlights the importance of questioning, encouraging investors to ask not just 'what should I buy' but 'why can this company succeed', thereby improving the quality of investment decisions through deeper inquiries.
See More
Netflix Acquisition Plans Halted, Stock Recovers
- Acquisition Plans Halted: Netflix's plan to acquire Warner Bros. Discovery for $82.7 billion was abandoned as Warner opted for Paramount's offer, leading to a recovery in Netflix's stock from a recent 42% decline, indicating renewed investor confidence in the company's future.
- Strong User Growth: By the end of 2025, Netflix had over 325 million paying subscribers, significantly outpacing rivals HBO Max and Disney+, demonstrating the effectiveness of its content spending strategy in attracting new members and solidifying its market dominance.
- Advertising Revenue Surge: Although advertising revenue accounted for only $1.5 billion of total revenue in 2025, it grew by over 150%, with expectations to double again in 2026, providing Netflix with additional funds for premium ad slots and enhancing its profitability.
- First Quarter Performance Expectations: Management anticipates first-quarter revenue for 2026 to reach $12.2 billion, reflecting a 15.3% year-over-year growth, which would mark the best quarterly performance in the company's history, showcasing Netflix's strong momentum in a competitive streaming market.
See More
