Reaction by Stock Analysts, Price Targets

The atmosphere and focus were very different as streaming giant Netflix unveiled its first-quarter 2025 results after the stock market close on Thursday. There was, as the company has been planning for a year, no update on subscriber growth or figures, but instead more management emphasis on financial trends.

Wall Street analysts, several of whom have recently come out touting Netflix as a safer, “defensive” stock amid recession fears, have now reacted to what they read and heard in the latest earnings update. And the tenor is mostly positive, thanks to advertising revenue upside and confidence that financial forecasts and stock price targets have still been too low.

Netflix management, led by co-CEOs Ted Sarandos and Greg Peters, touted in an earnings call such original hits as Adolescence and season 2 of The Night Agent. And analysts liked their commentary.

“Consistent Execution” is how Guggenheim analyst Michael Morris summarized his takeaways from the first-quarter earnings update. While maintaining his “buy” rating, he boosted his stock price target by $50 to $1,150 on higher financial projections. “Solid first-quarter results were headlined by profitability beat (both operating and net income) with outperformance benefiting from revenue ahead of the company’s guidance (in-line with our above-consensus forecast) and expense timing,” he wrote. “Second-quarter guidance was similarly ahead of our/consensus prior estimates.”

And Morris touted broader upside. “We continue to see opportunity to grow members with management noting they ‘still have hundreds of millions of folks to sign up’ with the service comprising less than 10 percent of TV hours and around 6 percent of consumer spend/ad revenue,” the expert emphasized. “Leadership highlighted positive ad indicators heading into the upfront, with minimal observed impact from macro headwinds to date.”

BMO Capital Markets analyst Brian Pitz also stuck to his “outperform” rating while lifting his stock price target on Netflix, in his case by $26, to $1,200 due to his now increased financial estimates. He focused his report’s headline on these core takeaways: “Ramping Ad Opportunity + Margin Expansion Ahead.”

Among the key reasons to be bullish is what Pitz called “multi-year durable ad growth opportunity ahead,” as he noted: “The AVOD tier will continue to scale, driven by engagement growth, pricing levers, and programmatic/AI capabilities set to launch in 2026 and beyond.”

Gaming is also “a long-term opportunity,” the expert highlighted, while pointing out that it is currently “a negligible component of Netflix’s revenue drivers.”

With Netflix no longer disclosing subscriber growth, “the better-than-expected results/outlook enhances management credibility to navigate through its AVOD transition and a challenging macro” environment, Pitz argued and highlighted: “We view the May 14 upfront as a growth catalyst for Netflix shares.”

“More Monetization, More Margin” was the headline of the report from Robert Fishman, analyst at MoffettNathanson who recently moved from a “neutral” to bullish “buy” rating. After Netflix’s earnings update, he also pushed his stock price target higher – by $50 to $1,150.

After unlocking new subscribers with the launch of its ad tier, there is more upside for the firm. “Following the recent U.S. launch of Netflix Ads Suite, its in-house first-party ad tech platform, we believe the company will be able to effectively ramp monetization of these incremental subscribers,” Fishman argued.

And he sees more room for subscriber price hikes. “When looking at U.S. revenue per hour viewed, Netflix still appears to be underearning relative to its engagement and even after the recent price increases still has a consumer surplus to further raise prices,” the expert explained.

Assessing first-quarter results, Fishman pointed out that total company revenue growth was “roughly in line with our estimate, while expenses came in 4 percent lower, driving a 9 percent earnings before interest and tax beat.”

By region, Netflix “outperformed our revenue growth estimates in Asia Pacific and Europe, the Middle East and Africa, while results were slightly weaker in Latin America and the U.S. and Canada,” the MoffettNathanson analyst shared. “On U.S./Canada specifically, management noted that first-quarter revenue growth was impacted by the timing of price increases (with the first-quarter only seeing a partial uplift), plan mix and the absence of advertising revenue from the Christmas Day NFL games. In turn, U.S./Canada revenue growth is expected to reaccelerate in the second quarter.”

Meanwhile, TD Cowen analyst John Blackledge maintained his “buy” rating and $1,150 stock price target in a report that highlighted a “big operating income beat” in the latest quarter. He also highlighted that “management noted strength in member retention and ad buyer interest despite macro volatility.”

Similarly, Evercore ISI analyst Mark Mahaney retained his “outperform” rating on the stock with a price target of $1,100. “Somewhat surprisingly – given the first-quarter results and second-quarter outlook – Netflix maintained its full-year 2025 revenue guide … and its operating margin guide,” he pointed out. “But it’s possible that Netflix is giving itself plenty of dry powder for an aggressive content spend ramp.”

But Edward Jones analyst Dave Heger is less bullish, sticking to his “hold” rating without a price target on the streaming giant.

“Netflix is no longer reporting subscriber additions, but we feel that financial results for the quarter were strong,” he wrote in his report. “We are encouraged that the company’s operating profit is tracking above our expectations, and guidance for the second quarter reflects a continuation of this result.”

Heger also suggested that ad trends can help the company amid more challenging subscriber gains trends. “We think that subscriber growth will slow somewhat in 2025, as Netflix has passed the anniversary of when it started charging a fee for shared accounts,” he said. “However, we believe it can continue to drive revenue growth from price increases and subscribers increasingly adopting ad supported services. Netflix is also transitioning to its own adtechnology platform, which we think will help it deliver more effective ad targeting and drive ad revenue growth.”

Growth was also a key theme for Pivotal Research Group analyst Jeff Wlodarczak who remains the biggest Netflix bull on the Street with a “buy” rating and a stock price target that the boosted by $100 after the latest earnings report to a Street high of $1,350.

In his report, simply entitled “Winning!,” he wrote: “Netflix reported yet another strong quarterly result, highlighted by better than expected first-quarter financial results, much better than expected second-quarter revenue and operating income guidance and a reiteration of full-year financial guidance, which given a nicely better-than-expected first quarter and second-quarter guidance appears too conservative.”

Wlodarczak’s conclusion: “Our view remains unchanged that Netflix has won the global streaming race as further evidenced by these results, and this is what, in our opinion, winning looks like.”

He also offered: “The key for Netflix going forward is to press their advantages and keep the subscriber/average revenue per user flywheel going because the larger they get, the more leverage they have over their peers/content creators, the better their product gets, the more cash they have to spend on compelling content, and the bigger the moat grows around their core business model.”

Wlodarczak is hoping for deals and AI upside ahead. “We also increasingly believe that Netflix management should be using its massive balance sheet/equity to fund acquisitions, such as a content library (as an example, Sony’s movie studio, assuming it eventually is for sale), sports leagues (Formula 1 or UFC/WWE, although admittedly these type of deals may have material regulatory hurdles), and/or other major assets that strengthen the platform, such as potentially video game assets,” he wrote. “We also believe AI has the potential to significantly improve their video content while also reducing the cost of such programming, although this is not built into our estimates.”

Given the interest in all things Netflix, industry watchers beyond stock analysts weighed in on its latest set of results.

“The market continues to reward global scale, brand loyalty, and effective content strategy,” Frank Albarella, U.S. media & telecom sector leader at KPMG U.S., noted, arguing: “This is becoming a winner-takes-most scenario. Several major players have the necessary scale but are struggling under the weight of legacy cost structures. This dynamic will lead to redefining core business models with consolidation on the horizon.”

PP Foresight analyst Paolo Pescatore touted “another impressive quarter” and liked that Netflix reaffirmed its full-year guidance”amid the uncertain economic outlook.” His takeaways: “Netflix is in prime position and calling all the shots. As it will no longer report subscriber numbers, it is firmly shifting the conversation away from subscribers towards financials and engagement.”

He also offered: “Having a diverse business model through subscription and a slow but rising ad-based tiers will mitigate any risks from tighter consumer spending that could drive cancellations. Netflix is an indispensable service in users’ lives. It will be the last subscription that users will cancel, given the broad and breadth of programming.”

The analyst concluded by calling Netflix “a well-oiled machine with plentiful opportunities for future growth through annual price rises, investment in content, growing advertising business, and moves to offer a bigger bundle with live events.”