Street analysts cheer Netflix’s robust Q3 report and maintain bullish sentiment; shares rise

Shares of Netflix (NASDAQ:NFLX) surged as much as 11% in early open market trading on Friday after the streaming giant easily topped expectations for profits and user growth in its third-quarter earnings report.

The company on Thursday after the bell posted Q3 GAAP EPS of $5.40, beating consensus by $0.28, and revenue of $9.82B was +15.0% Y/Y and ahead of expectations by $50M. For 2024, they expect revenue growth of 15% and an operating margin of 27%.

Several Wall Street analysts, while maintaining rating and increasing price target, weighed in with their thoughts on the key takeaways from the company’s report.

Jefferies: The research firm said Q3 results were solid as net adds of 5M came ahead of expectations, and they noted that 2025 revenue guidance of 11-13% only suggests a slight deceleration against estimates of 15% in 2024. They see +10M subs in Q4, helped by a robust content slate like NFL games and Squid Game 2, but have less visibility into 2025. They said the company doesn’t expect ads to be a primary contributor to 2025 growth but believes it could still drive $1B+ in incremental revenue. They reiterated “buy” and hiked PT to $800 from $780, implying an upside of more than 16%.

“Despite a weaker content slate, password sharing and international expansion led to another +5M of net adds in Q3, and the company pointed out price hikes across many international markets, including Scandinavia, Japan, and newly-announced price hikes in Italy and Spain,” Jefferies added.

Morgan Stanley: The research firm believes Q3 results and Q4 guidance were ahead of expectations as the company guided to another year of “healthy double-digit revenue growth and margin expansion in ’25.” They also noted that the company is increasing the rate of investment growth in ’25 as it builds more international and live content, its ad infrastructure, and games business. “Netflix is poised to remain the largest and fastest-growing streaming service in the world as it heads into 2025. Its ability to grow earnings 20–30% annually over time stems from layering on additional growth levers—paid sharing, ads, live, games—while increasing its return on content spend,” MS analysts wrote. They maintained “buy” but hiked PT to $830 from $800, implying a nearly 21% upside.

KeyBanc: They think NFLX’s Q3 report “contained few surprises,” with paid net adds falling between its/Wall Street expectations, Q4 OM% indicated above expectations, and 2025 guidance set at reasonable levels. They think Netflix is poised for more balanced growth between subscribers and monetization over the medium term. As efforts like paid-sharing and the ad-supported tier ramp, they believe Netflix can sustain a LDD% revenue growth profile and 25%+ annual EPS growth. They maintained an “overweight” rating and hiked PT to $785 from $760, implying an upside of 14%.

J.P. Morgan: Strong financials helped offset Q3 subscriber net adds, which were below Street expectations for ~6M & JPM’s estimate of 7M. “Importantly, we believe NFLX is confident in the $43B-$44B revenue outlook for ’25, and we still believe a US Standard tier increase is likely in 1H25. Looking to 2025, Paid Sharing will essentially be in the rear-view mirror, Ad tier scale will continue to build, and NFLX should have healthy organic and secular growth driven by strong content,” JPM analysts said in their October 18 note. They reiterated “overweight” and hiked PT to $850 from $750, implying an upside of nearly 24%.

Bank of America: The research firm said by geography, NFLX’s Q3 net add strength was driven by APAC and EMEA, while LATAM experienced modest declines due to price increases and timing of the content slate. They think the company remains one of the best-positioned within media and has several growth drivers, including the accelerating ramp of its burgeoning ad business, which is expected to double in ’25 and become a multi-year growth driver in ’26 and beyond, along with Gaming, Live, and Sports. They reiterated “buy” and raised PT to $800 from $740, implying an upside of 16%.

Piper Sandler: “We were impressed with the company’s execution, as Netflix delivered strong mid-teens revenue growth even as we lap tough comps. Our two takeaways from the initial 2025 revenue guidance were that subscriber growth should once again be the biggest driver, and management was able to meet consensus expectations without announcing a major UCAN price increase. Despite being more balanced next year with investments, we see upside to the initial 2025 operating margin target based on recent execution,” the research firm said, while reiterating “overweight” and hiking PT $840 from $800, implying an upside of 22%.

UBS: The research firm sees NFLX as “the main beneficiary of rationalizing DTC competition” and said Q3 results were generally ahead, while company’s commentary pointed to sustained double-digit revenue growth and margin expansion in 2025. They expect ad revenues to double in 2025 but do not expect it to be a primary driver of overall growth. They noted that management suggested revenue growth will be more member-driven than ARM-driven in 2025. They maintained “buy” and hiked PT to $825 from $750, implying an upside of 20%.