Netflix stock holds steady with Loop Capital’s $1000 target

Monday, Loop Capital maintained its Hold rating on Netflix (NASDAQ:NFLX) stock with a $1,000.00 price target. The firm’s analyst, Alan Gould, acknowledged the company’s revenue growth, which surpassed management’s foreign exchange neutral guidance, increasing by 13% on a reported basis and 16% on an FX-neutral basis. Netflix’s operating margin also exceeded expectations, coming in 250 basis points above guidance, largely due to the timing of content expenditures. According to InvestingPro data, Netflix has achieved a perfect Piotroski Score of 9, indicating exceptional financial strength, while maintaining a "GREAT" overall financial health rating.

For the second quarter, both revenue and operating margin outperformed consensus estimates. Despite these positive results, Netflix did not alter its full-year revenue guidance, although the company is on track to reach the higher end of its guidance range considering current exchange rates. Gould noted that Netflix has experienced six consecutive quarters of margin increases but chose not to adjust operating margin guidance in the current macroeconomic climate, suggesting limited benefit in raising full-year forecasts under these conditions. InvestingPro analysis shows the company’s impressive 75% return over the past year, with 13 analysts recently revising their earnings expectations upward for the upcoming period.

Furthermore, Netflix management has ramped up its share buyback program to $3.5 billion this quarter, marking its highest quarterly amount to date. The buyback was executed at an average share price of approximately $950. Gould emphasized Netflix’s dominant position in the streaming market, highlighting its resilience in the face of economic challenges and tariffs, as previously mentioned in an industry note that also included Comcast (NASDAQ: NASDAQ:CMCSA), Fox Corporation (NASDAQ: FOXA), and Charter Communications (NASDAQ: NASDAQ:CHTR). With a market capitalization of $414.2 billion and a P/E ratio of 46, InvestingPro analysis indicates the stock is currently trading above its Fair Value, though the company maintains strong fundamentals with sufficient cash flows to cover interest payments.

Following the announcement, Netflix shares experienced a 3% increase in after-hour trading. Gould’s commentary indicates that the decision to maintain the price target and Hold rating is based strictly on the current valuation of Netflix shares. For deeper insights into Netflix’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which includes detailed analysis of the company’s financial health and future potential.

In other recent news, Netflix reported a strong first-quarter performance, with revenue reaching $10.5 billion, marking a 12.5% year-over-year increase. The company’s operating income of $3.3 billion exceeded expectations, and earnings per share (EPS) of $6.61 surpassed estimates by 17%. Wells Fargo (NYSE:WFC) raised its price target for Netflix to $1,222, citing a clear growth path and increased operating income margin estimates for 2025 and 2026. Morgan Stanley (NYSE:MS) also raised its price target to $1,200, emphasizing Netflix’s predictable business model and resilience. Citi maintained its $1,020 price target, highlighting Netflix’s strong operating income and EPS outlook. Goldman Sachs increased its price target to $1,000, noting Netflix’s robust financial performance and stable monetization patterns. Canaccord Genuity raised its target to $1,200, attributing Netflix’s success to stable customer acquisition and the strategic use of artificial intelligence in content production. These developments underscore Netflix’s strong financial results and the positive outlook from multiple analyst firms.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.