Netflix today
As of 01/24/2025 04:00 PM
- 52 week range
- $542.01
▼
$999.00
- P/E ratio.
- 49.30
- Target price
- $1,021.70
Netflix Nasdaq: NFLX Shares rose following the Q4 2024 earnings report and 2025 guidance update, driven by key accelerations in place to push the stock higher. These include an increased focus on expanding the business and increasing shareholder value, both of which have been strengthened each quarter.
The takeaway is that business is strong and outperforming, and quality has improved dramatically. This once diamond in the fire is now an industry leader and dominant player in a strong market, producing strong cash flow and proving its value to investors.
Netflix has built leverage for long-term growth in Q4 2024
Netflix had a strong quarter in Q4 2024, reflecting the impact of business leverage that continues to grow. Leverage appears in an increased membership price, increased membership, and higher leverage across the network. The $10.25 rise in quarterly revenue rose 16.1% because of this, missing the consensus estimate of about 150 basis points on a strong increase in members. Membership grew 6.6% sequentially and 16% year over year, setting company records and driving a wide margin.
Margin news is a driver of stock price action. The company’s efforts to improve operating quality and leverage its content produced significantly wider margins for the quarter and full year. Operating margin expanded 530 basis points for the quarter and 600 basis points for the year, and there are expectations for expanded margin in 2025. The bottom line is $4.27 in GAAP earnings, 167 basis points better than expected, and enough free cash flow to maintain the balance sheet. for the castle and the newly acquired investment grade debt rating.
Guidance is mixed with expectations for Q4, below the analyst consensus but offset by expected guidance and a high probability of caution. Regardless, the company expects double-digit growth in 2025 with strength in the back half and building tailwinds in the advertising space. Ad levels work well, drive membership gains, and are expanding.
Netflix builds shareholder value with aggressive buyback program
Netflix MarketRank™ stock analysis
- Overall MarketRank™
- 90 percent
- Analyst rating
- Moderate purchase
- Upside/Downside
- 4.5% up
- Short attention level
- correct
- Earnings power
- us
- Environmental outcome
- -0.30
- News feelings
- 0.83
- Insider trading
- Sell stocks
- Bruges. Earnings growth
- 21.71%
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Netflix’s cash and growth forecasts leave it in a healthy financial position, capable of significant capital returns and capital return growth. Highlights from Q4 and 2024 include increased cash and assets, reduced debt, and a 20% increase in equity. The stock’s gains are exacerbated by redundancies, which reduced the number by 1.6% in Q4 and 2.3% annually. The pace of buybacks is expected to continue in 2025 due to increased allocation. The board increased licensing by more than $17 billion, or enough to last about three years at 2024 pace.
Analysts respond aggressively, upgrading shares and increasing their price targets in response to the news. The consensus rating is within the Moderate Buy range but leaning toward Buy, with the price up 5% overnight after the release, 15% since late 2024, and about 75% for the prior 12 months. Consensus assumes fair value near $850, but post-release reviews have this stock above $1,100, with a chance of hitting $1,500. Rosenblatt made the case for the Taurus, which has been promoted to buy with a target of $1,494.
Netflix has room to run
The Netflix chart shows that this market has room to run, as the price action is still well below the newly indicated price range. The caveat is that post-release action will create a gap at the open and provide an attractive exit point. The stock is up nearly 500% in the past three years and at record levels. This market could pull back and close the gap before moving higher to set new highs near $1,100 or higher.
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