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Netflix (NFLX) stock has witnessed a pullback over the last month due to broader market concerns tied to macroeconomic uncertainty. However, MoffettNathanson analyst Robert Fishman isn’t discouraged and sees growth potential in the streaming giant.
- Fishman has upgraded Netflix stock from a “Hold” to a “Buy” rating, significantly increasing his price target from $850 to $1,100. This optimistic outlook suggests 18% upside potential from current levels.
One key reason for this bullish stance is Netflix’s ability to drive user engagement and effectively monetize it. The analyst believes that Netflix’s ability to monetize its massive user base presents significant growth opportunities. Further, Fishman is bullish about NFLX’s ad-supported business and believes that it could drive stronger profit margins and support earnings growth.
While NFLX stock got a lift from bullish analyst sentiment, its long-term potential will hinge on Netflix’s ability to attract new subscribers, expand its content offerings, effectively monetize user engagement, and scale its advertising business. Let’s examine Netflix’s growth potential to see if it’s a buy.
Netflix’s Strong Subscriber Growth and Market Opportunity
Netflix is entering 2025 with strong momentum, building on an extraordinary 2024 that saw the platform add a record-breaking 41 million new subscribers. NFLX’s ability to monetize its user base efficiently has accelerated revenue growth, further solidifying its dominance in the streaming industry.
Despite its massive expansion, Netflix still has a significant growth runway. Management estimates that its target markets (excluding China and Russia) contain over 750 million broadband households, with an estimated entertainment revenue pool exceeding $650 billion. However, Netflix has captured only around 6% of this market, leaving substantial room for expansion and further monetization.
NFLX’s Engaging Content: The Key to Retention and Growth
A major driver of Netflix’s success is its ability to keep audiences engaged with high-quality content. According to company data, the average subscriber now spends two hours per day on the platform. Popular series such as Squid Game, Stranger Things, and Wednesday are returning in 2025, ensuring that subscriber retention remains strong and new viewers continue to flock to the service.
Beyond its hit series, Netflix continues to invest heavily in original films and live events. This sets it apart from peers and strengthens its position as the go-to entertainment platform.
The Rise of Netflix’s Ad Business
Beyond its content, Netflix’s advertising business is rapidly emerging as a key revenue driver. The company’s ad-supported plan attracted more than 55% of sign-ups in available markets. Membership in these ad-supported tiers grew 30% quarter-over-quarter in Q4 2024, following a 35% jump in the previous quarter. These figures highlight consumer demand for cost-effective streaming options, enabling the company to tap into the large advertising market.
Netflix’s ad business is poised for further growth in 2025. By enhancing its advertising capabilities and expanding its reach, the company is well-positioned to drive substantial ad revenue, complementing its traditional subscription model and improving overall profitability.
Netflix’s Strategic Monetization Efforts
Netflix continues to enhance its monetization strategy, implementing initiatives that improve revenue while maintaining strong user engagement. The company’s crackdown on password sharing has converted many non-paying viewers into subscribers, bolstering revenue. Additionally, the introduction of an Extra Member with Ads option in select markets has provided users with more flexibility while generating additional income.
Moreover, Netflix has strategically increased prices in key markets, including the U.S. These adjustments help fund continued content investment, improve the user experience, and support profitability.
Will Netflix Stock Hit $1,100 Soon?
With its robust subscriber growth, expanding ad business, and strong content strategy, Netflix is well-positioned for continued growth in 2025. The company recently raised its full-year revenue forecast to $43.5 billion to $44.5 billion, reflecting strong business momentum and management’s optimism about future performance.
With all these growth drivers in place, analyst Fishman’s price target of $1,100 for NFLX stock looks achievable.
Overall, Wall Street analysts maintain a “Moderate Buy” consensus rating on the stock. The average price target of $1,074.26 implies 16% upside potential from current levels.
