Netflix Stock Outlook: Is Wall Street Bullish or Bearish?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 11 2024
0mins
Should l Buy NFLX?
Source: NASDAQ.COM
Netflix's Financial Performance: Netflix has shown strong financial growth, with a 63.3% increase in stock prices year-to-date and a 15% rise in total revenues to $9.8 billion, driven by significant subscriber growth, particularly in the Asia-Pacific region.
Analyst Ratings and Future Projections: The stock holds a "Moderate Buy" consensus rating among analysts, with expectations of a 64.4% year-over-year EPS growth for the current fiscal year, while Guggenheim analyst Michael Morris raised the price target to $825, indicating potential upside from current levels.
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Analyst Views on NFLX
Wall Street analysts forecast NFLX stock price to rise
38 Analyst Rating
27 Buy
9 Hold
2 Sell
Moderate Buy
Current: 75.860
Low
92.00
Averages
129.47
High
152.50
Current: 75.860
Low
92.00
Averages
129.47
High
152.50
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's Financial Performance and Future Outlook
- Significant Revenue Growth: Netflix's sales skyrocketed from $1.3 million in 1998 to over $1.2 billion by 2007, demonstrating the successful expansion of its DVD-by-mail business, which laid the groundwork for its subsequent streaming operations.
- Profitability Improvement: After a loss of $57 million in 2000, Netflix quickly turned profitable, achieving $67 million in profit by 2007, showcasing its early success in controlling customer acquisition costs.
- Surge in R&D Spending: During the streaming era, Netflix's R&D expenses increased tenfold, leading to $8.83 billion in revenue in 2016, but net income was only $187 million, reflecting the immense pressure from infrastructure investments.
- Dramatic Profit Increase: By 2025, Netflix's sales are projected to quintuple while net income is expected to rise 60 times, indicating successful margin enhancement efforts, although recent stock price declines have raised investor concerns about future growth.
See More
Market Declines Amid AI Disruption Concerns
- Market Decline: The Dow Jones Industrial Average fell over 600 points, or 1.34%, while the S&P 500 dropped 1.57%, reflecting investor concerns about the potential disruptions caused by artificial intelligence across various sectors.
- Sector Rotation: As investors rotate out of industries most exposed to AI, office real estate and logistics stocks suffered significant losses, particularly due to fears that new AI tools could reduce the need for office space, causing market jitters.
- Tech Stocks Hit Hard: Cisco's shares plummeted 12%, marking its worst single-day drop since 2022, primarily due to rising memory prices impacting profit margins, while Apple's stock fell 5%, its largest one-day decline since last April, amid reports of delays in its Siri update.
- Economic Data Watch: The Bureau of Labor Statistics is set to release January's consumer price index, with economists forecasting a 2.5% year-over-year increase, which, if met, would bring the inflation gauge back to levels seen in May 2025, drawing significant investor attention.
See More
Roku Shares Surge Post-Earnings: Analysts See Potential for Growth in Streaming.
- Roku's Stock Performance: Roku's stock experienced a rally on Friday, indicating positive market sentiment.
- Analysts' Confidence: Analysts are increasingly optimistic about Roku's potential to succeed in the competitive streaming market.
- Earnings Report Impact: The company's strong fourth-quarter earnings report has contributed to the positive outlook from analysts.
- Streaming Wars Context: Roku is being viewed as a potential winner in the ongoing streaming wars among various platforms.
See More
Comcast's Ongoing Dynamics with Warner Bros. Deal
- Withdrawal Context: Comcast made an offer for Warner Bros. last year but withdrew it in December, indicating a cautious approach to media consolidation that may affect future acquisition strategies.
- Regulatory Scrutiny: The Netflix-WBD deal is under scrutiny from lawmakers concerned that it could harm competition in the streaming industry, reflecting the regulatory environment's impact on industry consolidation.
- Asset Spin-off Impact: Comcast announced the spin-off of most of its cable-TV assets, including USA Network and CNBC, by late 2024, with the spin-off completed in January this year, which may affect its negotiating power in media discussions.
- Market Dynamics Shift: As Paramount upgraded its bid for Warner Bros., which WBD is currently reviewing, this intensifies market competition and may place Comcast at a disadvantage in future acquisition negotiations.
See More
Netflix's Investment Returns Lag Behind Market Expectations
- Investment Return Analysis: Over the past five years, Netflix's return of 45.1% significantly lags behind the S&P 500's 91%, meaning a $100 investment would now be worth only $145.87, reflecting investor disappointment in its performance.
- Long-Term Performance Comparison: Despite the short-term underperformance, Netflix's stock has surged 830% over the past decade, indicating its long-term growth potential in the streaming industry, although short-term volatility may still affect investor confidence.
- Market Reaction: Netflix shares are currently trading 38.6% below their peak from June last year, primarily due to Q3 2025 earnings falling short of expectations amid a tax dispute in Brazil, raising concerns about its future profitability.
- Acquisition Pressure: The announcement of acquiring certain assets of Warner Bros. Discovery at an enterprise value of $82.7 billion has drawn market dissatisfaction regarding the high debt Netflix will incur, which could further impact its stock price and investor sentiment.
See More
Apple Acquires 'Severance' to Boost Streaming Prospects
- Acquisition of 'Severance': Apple has acquired the rights and intellectual property of 'Severance' for approximately $70 million, aiming to make it the flagship of its original content, which is expected to enhance its competitive position in the streaming market.
- Viewer Growth Potential: The show's viewership doubled from season one to season two, and if costs remain unchanged, it is projected to become profitable in season three, thereby positively impacting Apple's streaming business financially.
- Content Strategy Shift: Apple plans to reduce external content acquisitions and focus on producing high-quality in-house content, leveraging its own studio to increase content output in response to competitive pressures in the streaming market.
- Market Valuation Upside: With the launch of 'Severance' and other new content, the potential value of Apple's streaming segment may be undervalued, with prospects for attracting more users through a rich content library and live sports events.
See More
Netflix's Financial Performance and Future Outlook
- Significant Revenue Growth: Netflix's sales skyrocketed from $1.3 million in 1998 to over $1.2 billion by 2007, demonstrating the successful expansion of its DVD-by-mail business, which laid the groundwork for its subsequent streaming operations.
- Profitability Improvement: After a loss of $57 million in 2000, Netflix quickly turned profitable, achieving $67 million in profit by 2007, showcasing its early success in controlling customer acquisition costs.
- Surge in R&D Spending: During the streaming era, Netflix's R&D expenses increased tenfold, leading to $8.83 billion in revenue in 2016, but net income was only $187 million, reflecting the immense pressure from infrastructure investments.
- Dramatic Profit Increase: By 2025, Netflix's sales are projected to quintuple while net income is expected to rise 60 times, indicating successful margin enhancement efforts, although recent stock price declines have raised investor concerns about future growth.
See More
Market Declines Amid AI Disruption Concerns
- Market Decline: The Dow Jones Industrial Average fell over 600 points, or 1.34%, while the S&P 500 dropped 1.57%, reflecting investor concerns about the potential disruptions caused by artificial intelligence across various sectors.
- Sector Rotation: As investors rotate out of industries most exposed to AI, office real estate and logistics stocks suffered significant losses, particularly due to fears that new AI tools could reduce the need for office space, causing market jitters.
- Tech Stocks Hit Hard: Cisco's shares plummeted 12%, marking its worst single-day drop since 2022, primarily due to rising memory prices impacting profit margins, while Apple's stock fell 5%, its largest one-day decline since last April, amid reports of delays in its Siri update.
- Economic Data Watch: The Bureau of Labor Statistics is set to release January's consumer price index, with economists forecasting a 2.5% year-over-year increase, which, if met, would bring the inflation gauge back to levels seen in May 2025, drawing significant investor attention.
See More
Roku Shares Surge Post-Earnings: Analysts See Potential for Growth in Streaming.
- Roku's Stock Performance: Roku's stock experienced a rally on Friday, indicating positive market sentiment.
- Analysts' Confidence: Analysts are increasingly optimistic about Roku's potential to succeed in the competitive streaming market.
- Earnings Report Impact: The company's strong fourth-quarter earnings report has contributed to the positive outlook from analysts.
- Streaming Wars Context: Roku is being viewed as a potential winner in the ongoing streaming wars among various platforms.
See More
Comcast's Ongoing Dynamics with Warner Bros. Deal
- Withdrawal Context: Comcast made an offer for Warner Bros. last year but withdrew it in December, indicating a cautious approach to media consolidation that may affect future acquisition strategies.
- Regulatory Scrutiny: The Netflix-WBD deal is under scrutiny from lawmakers concerned that it could harm competition in the streaming industry, reflecting the regulatory environment's impact on industry consolidation.
- Asset Spin-off Impact: Comcast announced the spin-off of most of its cable-TV assets, including USA Network and CNBC, by late 2024, with the spin-off completed in January this year, which may affect its negotiating power in media discussions.
- Market Dynamics Shift: As Paramount upgraded its bid for Warner Bros., which WBD is currently reviewing, this intensifies market competition and may place Comcast at a disadvantage in future acquisition negotiations.
See More
Netflix's Investment Returns Lag Behind Market Expectations
- Investment Return Analysis: Over the past five years, Netflix's return of 45.1% significantly lags behind the S&P 500's 91%, meaning a $100 investment would now be worth only $145.87, reflecting investor disappointment in its performance.
- Long-Term Performance Comparison: Despite the short-term underperformance, Netflix's stock has surged 830% over the past decade, indicating its long-term growth potential in the streaming industry, although short-term volatility may still affect investor confidence.
- Market Reaction: Netflix shares are currently trading 38.6% below their peak from June last year, primarily due to Q3 2025 earnings falling short of expectations amid a tax dispute in Brazil, raising concerns about its future profitability.
- Acquisition Pressure: The announcement of acquiring certain assets of Warner Bros. Discovery at an enterprise value of $82.7 billion has drawn market dissatisfaction regarding the high debt Netflix will incur, which could further impact its stock price and investor sentiment.
See More
Apple Acquires 'Severance' to Boost Streaming Prospects
- Acquisition of 'Severance': Apple has acquired the rights and intellectual property of 'Severance' for approximately $70 million, aiming to make it the flagship of its original content, which is expected to enhance its competitive position in the streaming market.
- Viewer Growth Potential: The show's viewership doubled from season one to season two, and if costs remain unchanged, it is projected to become profitable in season three, thereby positively impacting Apple's streaming business financially.
- Content Strategy Shift: Apple plans to reduce external content acquisitions and focus on producing high-quality in-house content, leveraging its own studio to increase content output in response to competitive pressures in the streaming market.
- Market Valuation Upside: With the launch of 'Severance' and other new content, the potential value of Apple's streaming segment may be undervalued, with prospects for attracting more users through a rich content library and live sports events.
See More
