Netflix Inc (NASDAQ:NFLX, ETR:NFC) has earned a repeat ‘Outperform’ rating and $1,400 price target from Wedbush analysts, citing strong Q2 trends, robust pricing power, and expanding monetization levers.
Shares of Netflix traded up 1.1% at about $1,300 on Thursday, having surged more than 45% so far in 2025.
“Netflix has established a virtually insurmountable lead in the streaming wars,” Wedbush’s analysts wrote, noting the company’s dominant 2024 performance and promising trajectory heading into the second half of 2025.
Netflix added more than 41 million subscribers globally in 2024 before it ceased reporting subscriber numbers, ending the year, and its subscriber disclosures, “with a bang,” the analysts wrote.
While the company no longer provides subscriber additions or average revenue per member (ARM) data, Wedbush’s Q2 consumer survey suggests the business continues to show “stable subscriber growth and ARM across regions.”
“The solid uptick in respondents with an active subscription, along with the mix-shift toward premium subscribers following the recent price increases, indicates a notable increase in ARM,” they wrote.
The survey also suggested that churn has stabilized and that lower churn and less plan switching in Q3 2025 compared to Q2 2025 bodes well for revenue visibility into the second half.
Effective strategy
According to Wedbush, the company’s strategy of combining tiered pricing with a vast and engaging content slate, spanning original series, films, games, and live events, is proving effective.
“Even with higher pricing, offering its members a vast library of original and licensed content, as well as the option to trade down to less expensive tiers, has significantly limited churn,” the analysts wrote.
Netflix raised prices in key markets, including the US, UK, and Argentina, in Q1 and expanded the hikes into several more countries in Q2.
The analysts believe these increases will be a major revenue growth lever going forward. “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,” they wrote.
Looking ahead to Netflix’s Q2 earnings, due on July 17, after US markets close, Wedbush expects Netflix to beat both the Wall Street consensus and the company’s guidance.
The project revenue of $11.16 billion, ahead of the $11.04 billion consensus and Netflix’s $11.035 billion guidance.
EPS is expected to be $7.18, also above the Street’s $7.06 and management’s guidance of $7.03.
The analysts see operating margin expanding to 33.2%, up from 31.7% in Q1 and 27.2% in the prior-year quarter.
“Given the strong backdrop heading into the second half of 2025, we believe Netflix will be well-positioned to exceed its Q2 guidance and provide solid guidance for the remainder of the year,” the analysts concluded.