Netflix ended 2024 on a high note with two NFL football games, a halftime show by Beyoncé, and the return of hit series "Squid Game." But Netflix stock was tackled for a loss to start 2025. Investors are hoping the streaming video leader can get back on track with its quarterly earnings report next week.
The Los Gatos, Calif.-based company will report its fourth-quarter results late Tuesday.
Analysts polled by FactSet expect Netflix to earn $4.20 a share on sales of $10.12 billion in the quarter ended Dec. 31. In the year-earlier period, Netflix earned $2.11 a share on sales of $8.83 billion.
Wall Street is looking for Netflix to add 8.2 million new subscribers worldwide in the fourth quarter, for a total of 290.9 million.
However, Netflix has said this will be the last quarter that it will report quarterly subscriber numbers. The company said it is focused on revenue and operating margin as its primary financial metrics. It will use engagement, or time spent on the service, as an indicator of customer satisfaction.
Meanwhile, analysts will be looking for indications that Netflix's nascent advertising business is gaining traction. Plus, the Street wants to know if Netflix will be raising subscription prices this year.
Netflix Stock Gets Price-Target Hike
On Wednesday, BMO Capital Markets analyst Brian Pitz reiterated his outperform rating on Netflix stock and raised his price target to 1,000 from 825.
On the stock market today, Netflix stock fell 0.7% to close at 842.37.
Pitz increased his revenue and earnings estimates for Netflix for 2025 based on forecast growth in advertising. Netflix's advertising efforts will be helped by live programming such as the WWE pro wrestling series "Raw," which premiered on Jan. 6, he said.
Pitz estimates that Netflix will have 90 million subscribers for its ad-supported service by the end of the year, vs. 70 million now.
Also Wednesday, Wedbush Securities analyst Alicia Reese maintained her outperform rating on Netflix stock with a price target of 950.
"Netflix has established a virtually insurmountable lead in the streaming wars," Reese said in a note to clients. "Netflix can retain its moat while competitors try to replicate its business model."
The addition of a lower-priced, advertising-supported service is driving revenue growth and reducing subscriber churn, she said.
"We expect the ad tier to become the primary revenue growth driver by 2026," she said. "With global content creation, balancing costs, and increasing profitability, Netflix has reached the right formula."
In 2024, Netflix stock surged 83% to 891.32. So far this year, through Thursday's close, Netflix stock is down 5.5%.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
