Netflix (NFLX) stock rose about 4% in midday trading on Monday after MoffettNathanson analyst Robert Fishman upgraded shares to Buy from Neutral and boosted his full-year price target to $1,100 from $850 prior.
“Netflix has won the streaming wars. Case closed,” Fishman wrote in a note to clients. “But where does the company go from here? How much more runway for growth is ahead? Despite all of Netflix’s recent success in reinvigorating growth, we believe its engagement will allow the company to better monetize and unlock greater profits in the years ahead.”
Netflix stock has struggled in recent sessions as a broader market sell-off continues to slam high-flying tech names. Shares have fallen over 10% from the 52-week highs they reached just one month ago, when the stock was trading well above $1,000 a share.
But Fishman sees brighter days ahead, crediting the “Netflix flywheel” when it comes to the company’s ability to expand margins.
In his note, the analyst said Netflix can afford to spend more on content due to its vast number of subscribers, which currently sits at nearly 302 million globally. As a reminder, the company will no longer reveal subscriber data beginning in its 2025 reporting cycle.
“Because it has more content, it drives better engagement, leading to more subscribers and possibly better pricing power in a virtuous cycle,” Fishman said. “This is the enduring power of Netflix’s first-mover advantage in streaming.”
And with the company beginning to scale its two-year-old ad tier, a new runway of growth has been unlocked, according to the analyst.
Earlier this year, the company hiked subscription costs across its various streaming tiers in the US, including the ad plan, which still remains one of the cheapest tiers on the market.
Management said it decided to raise prices, as its content “has never been better,” with more movies and TV shows expected throughout 2025. Sports and live events have also become staples within the Netflix ecosystem.
In November, the Jake Paul and Mike Tyson match attracted over 108 million global viewers, becoming the most-streamed sporting event of all time. For context, the 2024 Super Bowl, which was the most-watched American TV broadcast ever, pulled in 124 million US viewers.
Similarly, the NFL games averaged around 30 million viewers. According to Netflix, it was its most-watched Christmas Day ever in the US. The company will continue to double down on sports amid the recent debut of WWE Raw. Rumors have also swirled the company could bid on UFC rights next.
