Netflix Inc (NASDAQ:NFLX, ETR:NFC) continues to have Wedbush analysts bullish, with the firm repeating its ‘Outperform’ rating and 12-month price target of $1,500 on the streaming giant, citing steady subscriber growth, growing ad revenue, and strong upcoming content.
Shares of Netflix are up almost 40% in the year to date, trading hands at $1,242 on Tuesday afternoon.
“Netflix continues to produce phenomenal results with ever more growth in its sights,” Wedbush wrote in a note to clients.
While the company no longer reports subscriber additions and revenue per member (ARM), Wedbush noted that “our survey results, data, and our advisors suggest that subscriber growth continues, subscribers have absorbed the price increases with little resistance, and Netflix’s advertising engine is beginning to hum.”
Wedbush expects Netflix’s ad revenue to become the company’s primary revenue driver starting in 2026.
“As Netflix continues to enhance its ads business by expanding partnerships, improving targeting, and adding more live content, its aim of doubling ads revenue this year is entirely achievable,” the analysts wrote.
With planned investments of $18 billion in content spanning movies, high-demand series, games, and live events, Wedbush sees upside potential to Netflix’s 2025 guidance.
“Netflix can accelerate ad revenue contribution for the next several years by adding and improving live events, enhancing ad targeting, expanding ad partnerships, and broadening its content strategy,” they wrote.
The analysts also highlighted strong engagement metrics, noting that “its premium and ad subscribers are engaged, and churn is limited.”
They added that as the business scales, “contribution margin can easily exceed our estimates, driving outsized free cash flow.”
Q3 earnings preview
Netflix is scheduled to report its Q3 results on October 21 after US markets close.
Wedbush expects Q3 revenue of $11.528 billion versus the Wall Street consensus of $11.525 billion, and EPS of $6.90 versus the consensus of $6.92.
The firm’s survey of the US market indicated steady performance for Q3, providing optimism for the holiday quarter.
“In Q3, 2025, we saw relative parity between the ad-supported tier and premium tiers, with steady quarter-over-quarter stated subscribers and more year-over-year stated subscriber growth in Q3,” they highlighted.
“The advertising tier continues to limit churn, as evidenced by Q3, 2025 subscribers more likely to either switch to the premium tier or remain on the ad-tier in Q4, 2025 relative to Q2, 2025 and Q3, 2024.”
The analysts also noted “an uptick in respondents definitely or likely to return in Q4, 2025, driven by those who have never subscribed.”
Wedbush also expected Netflix to deliver strong Q4 guidance, despite only marginally exceeding consensus and company guidance for Q3.
“With a jolt of major live events in Q4 when subscriptions and viewership are highest, Netflix’s new relationship with Amazon Ads likely to impact results by year-end, and with one of the most successful upfronts this year benefiting Netflix in Q4, 2025 and throughout 2026, Netflix is poised to beat Q4 expectations,” the analysts concluded.
- Updated with share price movement -