Key Takeaways
- Netflix shares popped Wednesday after the company reported 19 million new subscribers in the fourth quarter and lifted its 2025 outlook.
- The streamer also raised its subscription prices, which analysts say is likely to drive revenue growth with “little pushback.”
- Analysts at several firms raised their price targets on the stock following the results.
Netflix (NFLX) is entering 2025 “firing on all cylinders” after adding 19 million subscribers in the fourth quarter and raising its subscription prices, JPMorgan analysts said Wednesday.
Netflix yesterday said it would raise prices—including bumping its popular ad-supported plan to $7.99 from $6.99 in the US— after what may be its “strongest content quarter ever,” the analysts said.
“Heading into a robust 2025 slate, we expect little pushback” in the US, said JPMorgan.
The higher prices come as Netflix’s ad-supported tier drove 55% of all Netflix fourth-quarter signups in markets where the plan was available. That increase, which helped the company end the year with more than 300 million members, sets the stage for more revenue growth in 2025, Wedbush analysts said.
Yesterday’s results lifted Netflix stock today, with the shares recently up about 11% to lead all gainers in the S&P 500 and some on Wall Street lifting already-bullish price targets.
Both JPMorgan and Wedbush maintained “buy” or equivalent ratings and raised their price targets to $1,150. Analysts at Oppenheimer and UBS set the same target following the results. Bank of America raised its target to $1,175. The shares recently traded a few bucks under $970.
“While massive subscriber growth was the primary driver in 2024, we expect price increases to drive revenue growth in 2025 and the ad tier to drive revenue higher in 2026,” Wedbush said.