Street Calls of the Week
Investing.com - Jefferies has reiterated its Buy rating on Netflix (NASDAQ:NFLX) stock with a price target of $1,500.00 following the streaming giant’s third-quarter results. The streaming leader, now valued at over $527 billion, has delivered an impressive 57% return over the past year. According to InvestingPro analysis, Netflix maintains a perfect Piotroski Score of 9, indicating exceptional financial strength.
The firm noted that Netflix delivered mixed results in the third quarter, with revenue growth of 17% year-over-year aligning with expectations. The company achieved an operating margin of 33.6%, excluding one-time expenses, which exceeded forecasts. InvestingPro data shows Netflix maintains robust financials with a current ratio of 1.34 and sufficient cash flows to cover interest payments.
Netflix’s fourth-quarter revenue guidance projects 17% year-over-year growth, which Jefferies indicated was in line with expectations. However, the streaming company did not provide financial guidance for fiscal year 2026, which could create continued uncertainty regarding next year’s growth trajectory.
Jefferies maintained its bullish thesis on Netflix, citing a "long runway for DD% rev growth and margin expansion" in the coming years. The firm specifically highlighted advertising as a key driver for potential upside over the next several years.
The $1,500 price target remains unchanged as Jefferies expressed confidence in Netflix’s long-term growth prospects despite the mixed quarterly results and lack of forward guidance for fiscal 2026.
In other recent news, Netflix announced its third-quarter 2025 financial results, revealing a mixed performance. The company reported revenue of $11.51 billion, which aligned with projections but missed both guidance and Street expectations by a narrow margin of 0.1%. Despite meeting revenue forecasts, Netflix faced challenges with its earnings per share (EPS), which came in at $5.87, significantly below the anticipated $6.96, representing a 15.66% negative surprise. A $619 million expense related to a tax dispute in Brazil contributed to an 8% miss on operating income. Analyst firms BMO Capital and Evercore ISI both reiterated their Outperform ratings on Netflix, with price targets set at $1,425 and $1,375, respectively. Evercore noted that the revenue miss was a departure from Netflix’s recent trend of exceeding expectations. Despite the earnings shortfall, Netflix’s stock saw a slight increase, supported by positive developments in advertising and new product innovations. These developments highlight the ongoing challenges and opportunities faced by the streaming giant.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.