Netflix stock surges after earnings report, jump in subscribers

Celebrity Gig


A woman starts Netflix on a TV inside her apartment.

Artur Widak | NurPhoto | Getty Images

Netflix shares surged 16% Thursday following a promising quarterly earnings report.

The streaming giant reported several victories, including a 70% jump in its new ad-supported subscription tier.

As for overall subscribers, Netflix added 8.76 million subscribers for the third quarter, significantly higher than the 5.49 million Wall Street estimated. It’s the biggest jump in subscribers since the second quarter of 2020, when Covid-19 stay-at-home restrictions drove new sign-ups.

READ ALSO:  Ammonia-fueled marine engine cuts CO₂ emissions by 50%

Wednesday’s report extended a return to growth for Netflix — after the company in April 2022 recorded its first net subscriber loss in over a decade, creating fears that the market had been saturated — and several analysts celebrated the positive news.

Analysts at Morgan Stanley upgraded the stock to overweight and raised its price target to $475.

READ ALSO:  Bezos-backed freight firm Convoy shuts down. Read CEO memo here

“We believe Netflix will deliver the objectives it set out a year ago, accelerate revenue growth back to double digits and expand margins,” Morgan Stanley said in a Thursday analyst note.

Truist analyst Matthew Thornton said in a Thursday note that the password-sharing crackdown could continue to propel subscriber growth into the next year. The firm also upgraded Netflix to a buy rating and raised its price target from $430 to $465.

READ ALSO:  ICL Group (ICL): Fertile Soil for Stock Market Profits

“We upgrade to Buy with our thesis predicated on ongoing password sharing benefits (into 2024), advertising ramp (long-term), and share buybacks ($10b added), with top 3 tent-poles by 2025 (Squid Game, Wednesday, Stranger Things), with video games a free call option, and with optional growth levers available to NFLX,” Thornton said in the note.

Stock Chart IconStock chart icon

hide content

Netflix stock chart after third-quarter earnings.

Don’t miss these CNBC PRO stories:

Categories

Share This Article
Leave a comment