Netflix stock upgraded as content slate and ad growth drive record Q4 performance

On Wednesday, Canaccord Genuity upgraded Netflix (NASDAQ:NFLX) stock from Hold to Buy, setting a new price target of $1,150, up from the previous $940. The upgrade follows Netflix's strong performance in the fourth quarter, where the streaming giant surpassed expectations in paid memberships, revenue, and profitability.

With a current market capitalization of $371.75 billion and impressive revenue growth of 14.8% year-over-year, Netflix continues to demonstrate its market dominance. The company's stock has surged 79% over the past year, reflecting strong investor confidence. According to InvestingPro analysis, Netflix maintains a GREAT financial health score, though it currently trades above its calculated Fair Value.

Netflix's content lineup for 2025 looks promising, with the return of popular series such as "Squid Game," "Stranger Things," and "Wednesday," alongside an increase in live events.

Additionally, Netflix announced price increases for most subscription plans in the United States, Canada, Portugal, and Argentina, a move that was anticipated in its fiscal year 2025 guidance.

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Despite a Q1 outlook for revenue and profitability that fell slightly below expectations, Netflix's management revised its full-year 2025 guidance upwards. This adjustment partially reflects the benefits carried over from the fourth quarter's strong performance.

Canaccord Genuity acknowledged that their previous downgrade of Netflix stock less than a year ago, which was based on concerns about slowed member growth and valuation compression, was incorrect. Netflix has since proven its market leadership and the potential of its advertising tier to drive revenue in fiscal year 2026. The company is also expected to continue expanding its margins and generating free cash flow, leading Canaccord Genuity to increase their estimates and upgrade the stock to a Buy rating.

In other recent news, Netflix's stock price target has been raised by several analysts following strong growth and impressive quarterly results. Oppenheimer has increased its target to $1,150, citing conservative revenue guidance, modest price increases, and the company's return to a normalized content slate post-COVID as factors positioning Netflix for strong margin dynamics. KeyBanc also raised its target to $1,100, buoyed by the expectation of low double-digit percentage revenue growth in the medium term and an annual earnings per share increase of over 20%.

Piper Sandler increased its price target to $1,100, while Pivotal Research lifted its target to $1,250, both firms highlighting Netflix's remarkable quarter which saw the addition of 19 million net new subscribers, far exceeding estimates. Raymond (NSE:RYMD) James maintained a Market Perform rating, reflecting a positive response to the company's strong fourth-quarter performance.

These recent developments have been driven by Netflix's robust slate of original content, expansion of its advertising tier, and its ability to navigate the competitive streaming landscape while delivering value to shareholders.

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