Netflix Plans $82.7 Billion Acquisition of Warner Bros to Expand Content Library
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 21h ago
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Source: Fool
- User Growth Strategy: Netflix's launch of a $7.99 ad-supported subscription tier has attracted a significant number of new users, accounting for about half of all new signups, which enhances the company's position in the competitive streaming market.
- Acquisition Plan: Netflix plans to acquire Warner Bros for $82.7 billion, expected to add high-quality content including the rights to Harry Potter and Game of Thrones, further solidifying its market dominance, though it faces regulatory scrutiny.
- Financial Performance: With earnings of $2.39 per share over the last four quarters and a current P/E ratio of 38, below the three-year average of 44.8, Netflix's stock appears attractive, and if it achieves a projected $3.23 earnings per share in 2026, the P/E could drop to 28.1.
- Advertising Revenue Growth: Netflix's advertising revenue doubled in 2024 and is expected to double again in 2025, indicating strong financial growth potential as the ad-tier user base expands, which will significantly influence future financial results.
Analyst Views on NFLX
Wall Street analysts forecast NFLX stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NFLX is 139.13 USD with a low forecast of 95.00 USD and a high forecast of 160.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
36 Analyst Rating
28 Buy
7 Hold
1 Sell
Strong Buy
Current: 90.730
Low
95.00
Averages
139.13
High
160.00
Current: 90.730
Low
95.00
Averages
139.13
High
160.00
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.
