Netflix (NFLX) stock closed at a fresh record every day this past week, with shares securing their biggest weekly gain since January — and they could keep soaring.
A growing number of analysts are calling for the streaming giant’s shares to soon trade in the quadruple digits.
On Wednesday, Pivotal Research analyst Jeff Wlodarczak raised his price target on Netflix to a Street high of $1,100 a share, implying over 20% upside based on current trading levels of around $900.
Bank of America’s Jessica Reif Ehrlich followed one day later, boosting her target to $1,000 from $800. Jefferies analyst James Heaney also raised his target to $1,000 earlier this week.
The price target increases come despite some concerns over slowing growth for the streaming giant.
Wall Street analysts who cover Netflix have a median price target of just around $800 a share, according to the latest Bloomberg consensus estimates.
One of the main catalysts for the recent price target boosts is the company’s continued foray into live events, with the most recent boxing match between Jake Paul and Mike Tyson attracting over 108 million global viewers last weekend to become the most-streamed sporting event of all time.
The Netflix event’s impressive numbers came despite the streamer experiencing several technical glitches throughout the broadcast, which analysts (and investors) mostly shrugged off.
“We view the event as a (very) successful learning experience for NFLX and expect these technical issues will not happen again with future live events,” Pivotal Research’s Wlodarczak wrote on Wednesday.
The analyst said the event’s success likely means Netflix will “accelerate its offerings of ‘eventized’ live programming,” which will help lower subscriber churn and increase the streamer’s ability to raise prices.
“The NFLX service remains a highly compelling, frankly relatively inexpensive, entertainment alternative for consumers, which bodes well for future subscriber/average revenue per user growth,” he said.
Katie Taylor, Mike Tyson, Ariel Helwani, Jake Paul, and Amanda Serrano speak onstage at the press conference in promotion for the upcoming Jake Paul vs. Mike Tyson boxing match at The Apollo Theater on May 13, 2024, in New York City. (Sarah Stier/Getty Images for Netflix) ·Sarah Stier via Getty Images
Since the start of the year, Netflix shares have surged roughly 85%, far outpacing the broader markets and streaming rivals, including Disney (DIS) and Comcast (CMCSA). Over the 5-day period ending on Friday, the stock climbed about 9%. Much of the uptick has been driven by the company’s push into live content and the positive impact that could have on its ad-supported offering.
Netflix’s next big live event will be its NFL Christmas Day doubleheader, with the Kansas City Chiefs vs. Pittsburgh Steelers and the Baltimore Ravens vs. Houston Texans. Beyoncé will serve as the headline performer during the Ravens vs. Texans halftime show, which analysts said should help attract viewers outside of the US.
Jefferies’ Heaney, who described the success of the Paul-Tyson match as a “breakthrough” moment for Netflix’s live events strategy, said he’s increasingly confident the NFL Christmas Day games will outperform linear viewership and serve as a catalyst to ad growth.
BofA’s Reif Ehrlich agreed, adding, “Live and advertising are complementary growth drivers, as more live programming drives additional high value, premium ad inventory. Netflix’s ability to monetize this premium live inventory will be key to making advertising a multiyear growth driver.”
“With much of the subscriber growth seemingly representing improved monetization of an existing (and not growing) user base, we question whether the momentum can continue into next year,” MoffettNathanson analyst Robert Fishman wrote in a recent note to clients.
Valuation has also been a concern, with Fishman adding that Netflix’s stock “is massively expensive for a company whose own guidance implies a revenue deceleration into 2025.” Last month, Netflix said its revenue growth is expected to slow from an expected 15% this year to between 11% and 13% in 2025.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
