Macquarie analysts raised Netflix’s (NASDAQ:NFLX) price target to $965 from $795, maintaining an Outperform rating, citing the company’s strong subscriber growth trajectory and emerging revenue opportunities.
Netflix is projected to conclude 2024 with over 33 million new global subscribers, pushing its total base to 293 million. Blockbuster events like the Paul/Tyson fight, two NFL Christmas games, and the highly anticipated release of Squid Game 2 could even push these figures higher. However, this will mark the final quarter in which Netflix reports subscriber numbers, shifting investor focus toward other key performance indicators.
While subscription growth may decelerate as Netflix nears the end of its paid-sharing enforcement cycle, the company’s overall growth outlook remains robust. According to the analysts, Netflix is expected to unlock new revenue streams, including substantial contributions from its advertising initiatives. Ad revenue is forecasted to climb from $2 billion in 2025 to $4.5 billion by 2027, driven by enhanced ad tech partnerships with platforms like The Trade Desk and Magnite. These revenues carry high operating leverage, amplifying profitability.
Additionally, a projected 10-15% price increase for Netflix’s U.S. standard plan is anticipated to contribute approximately $600 million annually to the company’s top line.