Investing.com – Analysts at several brokerages have raised their ratings of Netflix (NASDAQ:NFLX)’s stock following a solid quarterly earnings report from the streaming video giant.
In the three months ended December 31, Netflix reported earnings of $4.27 a share on sales of $10.25 billion, topping estimates of $4.20 and $10.1 billion, respectively, according to an average of analysts’ projections cited by Reuters.
The company added 18.9 million users in fourth quarter, well above the 9.2 million anticipated, underpinned by a strong slate of content and growing demand for its advertising-sponsored membership tier.
Netflix’s advertising tier accounted for over 55% of sign-ups during the quarter, while membership on its ads plan grew nearly 30% quarter over quarter.
“A top priority in 2025 is to improve our offering for advertisers so that we can substantially grow our advertising revenue,” Netflix said. “We’ll roll out our first party ad platform in the remaining ads countries in 2025, starting with the US in April.”
Bolstered by the jump in subscribers, Netflix has raised the price of its ad-supported service in the US to $7.99 per month, up from $6.99, and increase the cost of its premium offering by 9% to $24.99. Prices have also been bumped up in Canada, Portugal and Argentina.
Analysts at Rosenblatt Securities lifted their recommendation for Netflix’s stock to “buy” from “neutral” following the report, arguing the firm is now “capable of topping” its 2025 guidance.
“Netflix delivered on so many levels in [the fourth quarter] that the equity needs to be rethought,” the analysts said.
Meanwhile, analysts at Barclays (LON:BARC) improved their rating to “equal weight” from “neutral”, while Canaccord Genuity analysts lifted their outlook to “buy” from “hold”.
“The content slate for 2025 appears to be very healthy, with new seasons of highly popular shows like ‘Squid Game’, ‘Stranger Things’, and ‘Wednesday’ complemented by a continued ramping of live events,” the Canaccord Genuity analysts wrote in a note to clients.
