Netflix shares skyrocketed in the latter part of January, bringing cheers to all Netflix stockholders. But what's the story for other market players? Let's delve into what everyone should know about the surge in the streaming platform and how analysts see its future.
First, check out the chart below, illustrating Netflix stock movements over the past five days. It shows a remarkable increase of more than 10% in a short span, a significant jump for shares with such substantial value. If you're interested in other major and widely discussed trends, take a look at what's happening with Bitcoin ETFs – they're all making waves on one page.
While the January surge is impressive, it doesn't stand out as much as the overall trend of Netflix stock since the beginning of 2023. There were challenging times without extraordinary catalysts like the need to stay home during the Covid pandemic or numerous AI technology projects. Nevertheless, Netflix stock has nearly doubled in price in about a year.
This aligns roughly with the average for FAANG stocks, although most in this group are more heavily influenced by AI-related developments.
The catalyst for the Netflix surge is the Q4 report, revealing a record number of subscribers – 260.8 million in total. The streaming service reported a whopping 13.1 million new paid subscribers in the last three months of 2023, compared to just 8.8 million in Q3. In essence, Netflix exhibited its strongest quarter since the Covid pandemic, even without the current global circumstances providing such a boost.
Netflix also highlighted its focus on the EMEA region (Europe, the Middle East, and Africa), producing and acquiring content in Great Britain, Germany, Spain, and other locations. Evidently, this strategy is paying off, as the EMEA countries showed the highest subscriber growth in this quarter.
Additionally, market participants appreciated that revenue results surpassed estimates, totaling $8.8 million against the expected $8.7 million.
Typically, earnings not only prompt chart reactions but also lead to adjustments in analyst target prices. Many analyst firms have already done so, and most experts are confident that Netflix stock still has room to grow. For instance, Citibank raised the target price to $555 from $500, DZ Bank to $600 from $495, Morgan Stanley to $600 from $550, JPMorgan to $610 from $510, and so on.
However, not all specialists share this opinion and have adjusted their targets accordingly. Hence, the one-year consensus forecast currently stands at nearly 0%. Remember, your opinion matters more than anything else. Therefore, it's crucial to conduct your own research before making any trading decisions.
