Netflix shares rose on Friday, buoyed by investor optimism that its strong content lineup will help the streaming giant maintain strong subscriber growth even as the password-sharing crackdown wanes. reached an all-time high.
The company, widely seen as the winner of Hollywood's streaming wars, saw its stock rise nearly 10% to $754.90, and if it continued rising, it would have added more than $28 billion to its market cap of about $295 billion.
The company predicted that the number of subscribers will continue to increase in the last three months of this year, when the Korean drama “Squid Game” will be revived, exceeding expectations for quarterly subscribers by more than 1 million.
The company's profits and sales also exceeded expectations, but this comes at a time when some analysts believe a slowdown in membership registration is inevitable given its success in curbing password sharing. It's a positive sign in the company's efforts to shift from increasing numbers.
Netflix added 5.1 million users in the third quarter, down from 8.76 million in the same period last year.
“While the third quarter showed the slowing in subscriber growth that we had expected, Netflix has other opportunities to continue to drive its performance,” Morningstar analyst Matthew Dolgin said. There is,” he said.
Part of the boost includes higher prices. After raising prices in Japan, the Middle East, Africa, and even parts of Europe in recent weeks, Netflix is also increasing prices in Italy and Spain, and some analysts believe it could see a similar move in the U.S. next year. I expect it to happen.
“Netflix did not announce any price changes, but it did signal that it has room to increase prices if it increases engagement,” Bernstein analysts said.
The ad-supported tier also showed signs of progress, accounting for more than 50% of sign-ups in countries where it was available in the third quarter, but Netflix doesn't expect advertising to be its main growth driver until 2026. I didn't expect it.
At least 20 analysts raised their price targets for the company following the results, with the median price target increasing from $706.38 to $760, according to data compiled by LSEG.
Netflix's stock trades at 30.40 times 12-month earnings estimates, compared to Walt Disney's 18.50 and Comcast's 9.65.
So far this year, Netflix stock is up about 41.2%, Disney is up 6.9%, while Warner Bros. Discovery is down about 31%.
Netflix to attract subscribers with strong lineup including new movie 'Knives Out,' latest season of 'Stranger Things,' and live events including two National Football League games on Christmas I'm betting.
Matt Blitzman, senior equity analyst at Hargreaves Lansdown, said: “Peers in the legacy media space are losing money, which means that while Netflix has an advantage in content production, “Other companies simply cannot afford to allocate more capital.”
