Netflix Inc (NASDAQ:NFLX, ETR:NFC) has free rein to grow revenue after unveiling a boom in subscriber numbers over the last quarter, Wedbush analysts have said.
A record 18.9 million subscribers were added during the fourth quarter, Netflix said on Tuesday, taking its year-end total to 302 million.
Having trounced expectations, this left the streaming service able to avoid updating investors on subscriber numbers “for a while” and instead focus “solely” on revenue.
Wedbush pointed to substantial price increases, which were also unveiled on Tuesday, alongside extra ad-tier features and expanded advertising.
Though this could prompt some subscribers to trade down to cheaper plans, analysts added US$18 billion in planned new content meant “meaningful upside” to guidance in 2025.
“The bottom line is that if the price increases drive more trade downs than churn, the result will be sooner ad-tier parity and even higher profitability,” analysts said.
An ‘outperform’ rating was reiterated as a result, while Wedbush hiked Netflix’s share price target from US$950 to US$1,150.
“While massive subscriber growth was the primary driver in 2024, we expect price increases to drive revenue growth in 2025 and the ad tier to drive revenue higher in 2026.
“As Netflix expands from here, its contribution margin can massively exceed our estimates, driving outsized free cash flow.”
Both UBS and Oppenheimer also upped Netflix’s share price target to US$1,150 respectively on the back of the update.
“We believe Netflix’s dominance will continue, given its clear advantage in producing high-engagement content and monetizing that content more effectively than peers,” Oppenheimer said.
UBS added growth was set to be further fueled over the coming year by new content from the likes of its ‘Stranger Things’ and ‘Squid Game’ franchises, alongside advertising, gaming and live content.
Revenue was seen climbing by 13% over the course of 2025 as a result.
Shares jumped 10.2% to US$958.14 on Wednesday.