Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
Investing.com - UBS raised its price target on Netflix (NASDAQ:NFLX) to $1,495.00 from $1,450.00 on Friday, while maintaining a Buy rating on the streaming giant’s stock. The streaming leader, now commanding a market capitalization of $515 billion, is trading near its 52-week high of $1,341.15. According to InvestingPro analysis, Netflix currently appears overvalued relative to its Fair Value.
The price target increase follows Netflix’s second-quarter results, which showed revenue growth of 17% year-over-year on a foreign-exchange neutral basis, in line with expectations and slightly higher than the 16% growth recorded in the first quarter. Operating income grew 45% during the quarter, exceeding analyst expectations of approximately 40%. The company maintains impressive profitability metrics, with a gross margin of 48.49% and return on assets of 20.05%.
Netflix management indicated that revenue growth was driven by member growth that exceeded expectations late in the quarter, higher pricing, and increased advertising revenues. The company now expects full-year foreign-exchange neutral revenue growth of 16-17%, up from its previous guidance of 14-17%.
The streaming service also raised its operating margin guidance, now expecting margins to expand approximately 300 basis points year-over-year to 30%, up from the previous target of 29%. UBS noted that half of this increase is attributed to foreign exchange effects, with the remainder driven by membership growth and advertising revenue.
UBS expressed optimism about upcoming content releases, noting that marquee shows like "Squid Game" (released June 27) and "Wednesday" (scheduled for August 6) should provide tailwinds for third-quarter performance, when Netflix projects 17% foreign-exchange neutral revenue growth and 25% operating income growth. InvestingPro data reveals Netflix has achieved a perfect Piotroski Score of 9, indicating strong financial health. Subscribers can access 20+ additional ProTips and a comprehensive Pro Research Report for deeper insights into Netflix’s performance and valuation metrics.
In other recent news, Netflix reported second-quarter results that exceeded consensus expectations, leading to raised revenue and operating margin guidance for the remainder of the year. The company increased its full-year revenue projection by $1 billion, driven by favorable foreign exchange rates and strong advertising momentum, with the operating margin forecast raised to 30%. Analysts have responded positively, with Rosenblatt raising its price target to $1,515 and maintaining a Buy rating, while MoffettNathanson increased its target to $1,400, also keeping a Buy rating. Canaccord Genuity reiterated its $1,525 price target, highlighting the company’s solid performance and improved guidance. Evercore ISI raised its price target to $1,375, citing strong subscriber growth and record-high operating margins. Despite these positive developments, Loop Capital maintained a Hold rating, citing valuation concerns. Netflix’s advertising business continues to perform well, with revenue on track to double year-over-year. The company expects user engagement to improve in the second half of 2025, supported by a robust content release schedule.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.