Internet television network Netflix is likely to see increased revenue per subscriber in the year ahead along with underappreciated growth in users, a Wall Street analyst says. But Netflix stock dipped on Monday.
Oppenheimer analyst Jason Helfstein on Sunday reiterated his outperform rating on Netflix stock and upped his price target to 725 from 615.
On the stock market today, Netflix stock slipped 0.6% to 600.93.
Netflix's average revenue per member should benefit from improvements in advertising monetization, subscribers paying for additional users and regional price increases, Helfstein said in a note to clients.
He estimated that Netflix's average revenue per member will increase 4% in 2024, supported by price increases in the U.S., U.K. and France, announced last October.
Netflix Stock Is On 3 IBD Lists
Meanwhile, subscriber additions could beat Wall Street estimates by 31% over the next three years, Helfstein said.
"We see a path to subscribers being potentially 17 million higher than Street estimates over the next three years," he said. Current estimates assume a substantial slowdown in paid sharing and ad-tier subscribers, despite bullish third-party engagement data, he said.
Meanwhile, competition from other streaming services is easing as rivals prioritize profitability. Those rivals include Walt Disney's Disney+, Warner Bros. Discovery's Max, Comcast's Peacock and Paramount Global's Paramount+.
Netflix stock hit a two-year high of 624.42 on March 4. Year to date, Netflix shares have risen 23%.
Netflix stock is on three IBD stock lists: IBD 50, Big Cap 20 and Stock Spotlight.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
