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.