Shares of Netflix (NFLX) edge higher in Monday's pre-market trading after Oppenheimer analysts reiterated their Outperform rating on the streaming giant, raising its price target from $615 to $725 per share. The firm cites long-term subscriber and average revenue per member (ARM) trends as the reason for its bullish perspective.
Yahoo Finance Reporter Madison Mills breaks down the latest development for Netflix and what it could mean for the company moving forward.
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Editor's note: This article was written by Nicholas Jacobino
Video Transcript
- Time for today's Stock to Watch, and that is Netflix' "Oppenheimer" feeling bullish on the stock, reiterating their outperform rating, boosting their price target. Madison Mills keeping a close eye on this from the floor of the New York Stock Exchange. Madison.
MADISON MILLS: Well, Shauna, it looks like according to this recent note that we have here, there's going to be an implied 20% gain for Netflix' stock this year. And that's due to a price target raised to $725. So that implies a 20% gain. This is a stock that's already had a huge rally this year up 24% year to date.
If you look at the past five days, you are seeing some redness, but that might be an indication of the broader market themes. A lot of analysts saying that this is a stock that's going to be able to withstand any macro and stock market headwinds to come just because of the fundamentals here.
So let me run through what you need to be looking at. If you're looking at this name, it's two themes here-- subscriber growth and annual revenue per member. That's going to be things like moving around some ad tier memberships to be able to increase market share, get as many users as possible, paying as much as possible.
And we know that Netflix has done a great job cracking down on password sharing. If they're able to continue to do that and get more customers paying for no ads in general, that's going to be a boon for the stock moving forward.
- All right, Madison, thanks so much for breaking down Netflix here this morning. Look, I, like many others out there, they might have been confused with "Oppenheimer," the movie, but it was clarified very briefly here for me. Thanks so much. Appreciate it, Maddie.
