Could Netflix Stock Hit $1,100 in 2025 After Stellar Q4 Earnings?

Netflix (NFLX) delivered stellar fourth-quarter (Q4) earnings after the market closed on Tuesday, Jan. 21. The company exceeded Wall Street's expectations on all key metrics, including subscriber growth, revenue, and adjusted earnings per share (EPS). Further, the company offered better-than-expected commentary around revenue growth for 2025.

The highlight of Netflix's stellar quarter was its addition of a record-breaking 18.91 million subscribers. This growth was supported by the broad strength across its content categories in all regions. Netflix's ability to attract users globally reflects the strength of its content strategy and its appeal to diverse audiences, increasing its dominance in the competitive streaming industry.

As Netflix enters 2025 with strong momentum, at least one Wall Street analyst expects NFLX stock to hit $1,100, the Street-high price target. This represents 26.5% upside from its last closing price of $869.68 on Jan. 21. Let’s dive deeper into NFLX’s recent performance and outlook for 2025, which will likely support its stock.

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What Will Drive Netflix’s Growth in 2025?

Netflix kicked off 2025 with impressive momentum, following a record-breaking year in which it added about 41 million new subscribers. The company’s revenue growth has also picked up pace, showing signs of continued strength. With its leadership in engagement, revenue, and profit, Netflix maintains a dominant position within a rapidly growing market.

The company’s management estimates that there are now over 750 million broadband households in its target regions, excluding China and Russia, and the total entertainment revenue in these markets exceeds $650 billion. Despite this massive opportunity, Netflix captured only around 6% of this market in 2024. This implies that the company has significant room for future growth as streaming expands globally.

Netflix’s impressive content library, steady increase in paid subscribers, and expanding advertising business all indicate a strong growth trajectory for 2025. The company has raised its revenue forecast for the year to a range of $43.5 to $44.5 billion, marking an increase of $500 million over its previous guidance. This revised outlook reflects a more favorable business environment, suggesting Netflix is well-positioned to build on its successes in the year ahead.

Solid Content Keeps Netflix Ahead of Peers

At the core of Netflix’s growth is its investment in diverse, high-quality content that keeps users engaged and loyal. On average, users now spend about two hours a day on the platform, reflecting Netflix’s continued dominance in the streaming space despite the growing competition.

The company’s crackdown on password sharing has also paid off. Many non-paying users were encouraged to convert to subscribers, boosting Netflix’s revenue. Netflix's vast library of content, including popular originals and new ventures like games and live events, positions it well to build an increasingly attractive platform for existing and new customers. Moreover, the return of mega-hits such as Squid Game, Wednesday, and Stranger Things in 2025 only adds to the company’s growth potential.

Strong Monetization and Ad Revenue Growth

Netflix is continually evolving its monetization strategy, focusing on offering a variety of pricing plans to cater to different consumer needs. The introduction of its ad-supported tier has broadened its appeal to cost-conscious viewers while allowing Netflix to diversify its revenue streams.

Additionally, Netflix has introduced an Extra Member with Ads option in several countries, giving users more flexibility while generating extra revenue. The company has also implemented price increases in select markets like the U.S., Canada, Portugal, and Argentina. This move reflects Netflix’s ongoing commitment to reinvest in content, enhance the user experience, and support its margins.

Netflix’s advertising business is also gaining traction, with its ads sales surpassing management’s expectations. In Q4, the ad-supported plan accounted for over 55% of sign-ups in countries with the offering, and membership in these plans grew by approximately 30% quarter-over-quarter, building on a 35% increase the previous quarter, with substantial growth in earlier periods as well.

Looking forward, Netflix's ad business is projected to achieve significant scale in 2025. The company focuses on enhancing its advertising capabilities to drive substantial ad revenue growth, supporting the platform's overall financial performance.

Bottom Line: Netflix's Path to $1,100

With a strong finish to 2024 and a promising outlook for 2025, Netflix’s stock is set to continue its upward trajectory. The company is well-positioned to build on its subscriber growth, robust content strategy, and growing advertising business. As Netflix further refines its core offerings and expands its new revenue streams, the path to $1,100 looks possible.

Wall Street analysts currently have a “Moderate Buy” consensus rating on Netflix stock.

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