Seaport Research Partners has recently elevated Netflix’s stock (NASDAQ: NFLX) rating to “buy” in anticipation of the company’s forthcoming earnings report.
This upgrade is spearheaded by analyst David Joyce, who has expressed confidence in Netflix’s potential for significant growth in several key areas. Joyce points to the company’s ability to expand its operating income margin and enhance its free cash flow conversion as primary factors for the optimistic outlook.
His price target for Netflix is $955, suggesting a potential increase of 12.6% from its latest trading price. This upgrade is consistent with the general sentiment among Wall Street analysts, most of whom have also assigned buy-equivalent ratings to Netflix.
Netflix Estimated to Have Added 9 Million New Subscribers
David Joyce’s analysis includes a revised prediction for Netflix’s net member additions, now estimated at 9 million new subscribers, a notable increase from his previous estimate of 5.7 million.
This adjustment is attributed to Netflix’s strong content lineup, including the eagerly awaited new season of “Squid Game” and the successful streaming of various special events.
These offerings are seen as key drivers for attracting new subscribers and maintaining Netflix’s competitive edge in the streaming industry. Joyce’s forecast aligns with the broader market perception that Netflix is poised for continued growth, bolstered by its robust content strategy.
Netflix’s stock has shown positive movement following the upgrade from Seaport Research Partners. The stock opened at $861.43, slightly above the previous close of $848.26, and is currently trading at $861.785.
Throughout the day, the price has fluctuated between a low of $855.62 and a high of $868.98. Despite a recent downturn in late December 2024, Netflix’s stock has exhibited a slight recovery, closing at $848.26 on January 15, 2025, before today’s rise. The stock’s 52-week range spans from a low of $476.06 to a high of $941.75, indicating a broad spectrum of price movement over the past year.
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Expectations for Netflix’s Upcoming Earnings
Netflix’s financial metrics reveal a strong market position, with a market capitalization of $368.38 billion. The company’s trailing price-to-earnings ratio stands at 48.606, with a forward price-to-earnings ratio of 36.127, suggesting anticipated earnings growth. The debt-to-equity ratio is 81.461, reflecting the company’s leverage strategy.
Netflix’s total revenue is reported at $37.59 billion, supported by trailing earnings per share of $17.73 and forward earnings per share of $23.78.
The consensus among analysts remains favorable, with a recommendation mean of 2.15556, indicating a general buy stance. The target price projections for Netflix vary widely, with a high of $1100.00 and a low of $550.00, while the mean target price is $870.3629, and the median target price is $888.00.
This range of target prices reflects differing views on Netflix’s future performance, yet the overall sentiment is optimistic. The recent upgrade by Seaport Research Partners and the positive momentum in stock price suggest a promising outlook for Netflix as it approaches its earnings report.
Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
