- Netflix stock surged on Thursday following a promising quarterly report.
- Netflix said its ad-based tier saw a 70% jump in subscribers.
- Netflix also beat overall subscriber estimates.
Netflix shares surged 16% on Thursday following a promising quarterly earnings report.
The streaming giant reported a number of victories including a 70% jump in its new ad-supported subscription tier.
As for overall subscribers, Netflix added 8.76 million subscribers for the third quarter, significantly higher than the 5.49 million that Wall Street estimated. It’s the biggest jump in subscribers since the second quarter of 2020, when Covid stay-at-home restrictions drove new sign-ups.
Wednesday’s report extended a return to growth for Netflix — after the company in April 2022 recorded its first net subscriber loss in over a decade, creating fears that the market had been saturated — and several analysts celebrated the positive news.
Analysts at Morgan Stanley upgraded the stock to overweight and raised its price target to $475.
“We believe Netflix will deliver the objectives it set out a year ago, accelerate revenue growth back to double digits and expand margins,” Morgan Stanley said in a Thursday analyst note.
Truist analyst Matthew Thornton said in a Thursday note that the password-sharing crackdown could continue to propel subscriber growth into the next year. The firm also upgraded Netflix to a buy rating and raised its price target from $430 to $465.
“We upgrade to Buy with our thesis predicated on ongoing password sharing benefits (into 2024), advertising ramp (long-term), and share buybacks ($10b added), with top 3 tent-poles by 2025 (Squid Game, Wednesday, Stranger Things), with video games a free call option, and with optional growth levers available to NFLX,” Thornton said in the note.
Source: Business - cnbc.com
