Netflix Stock Record High

Netflix Stock Surges 15% to Hit Record High of $988 on Subscriber Growth Boost

 

Netflix’s stock skyrocketed by 15% to reach an all-time high of $988 during early trading on Wednesday, fueled by impressive subscriber growth and strategic moves in the streaming market. The streaming giant’s global subscriber base swelled to over 300 million, cementing its leadership in the streaming industry.

Subscriber Surge Drives Market Rally

The company added a record-breaking 18.9 million subscribers in the holiday quarter, far exceeding Wall Street’s expectations. This growth was partly attributed to Netflix’s expansion into live sports, with standout events like the Jake Paul vs. Mike Tyson boxing match and the NFL’s Christmas Day games drawing massive viewership.

According to Laurent Yoon, an analyst at Bernstein, the performance was nothing short of extraordinary. “Netflix defied the odds once again, delivering subscriber additions far beyond even the most unreasonable expectations,” Yoon remarked.

Grey Market Premium and Subscriber Metrics

Despite this unprecedented subscriber growth, the revenue increase was comparatively modest, rising 16% to $10.2 billion. Analysts suggest this disparity is due to growth in regions with lower average revenue per user (ARPU) and increased sign-ups for the ad-supported tier.

Netflix plans to address this gap by rolling out price hikes in key markets, including the U.S., Canada, Portugal, and Argentina. The most popular U.S. subscription plan will now cost $17.99 per month, up by $2.50, while the ad-supported plan will also see price increases.

Live Sports: A Game-Changer

Netflix’s foray into live sports has proven to be a game-changer. The November 15 Tyson-Paul boxing match became the most-streamed sporting event in history, driving record sign-ups for the platform. Netflix’s content strategy also included the second season of Squid Game and the hit film Carry-On, further boosting its subscriber base.

Industry experts predict Netflix will likely bid for more major sports rights in the future. The company has already secured U.S. broadcast rights for the 2027 and 2031 FIFA Women’s World Cups. According to Dan Coatsworth, an analyst at AJ Bell, “Sports rights can be incredibly expensive, but Netflix’s focus on special events is a smart strategy for attracting advertisers and maximizing returns.”

Valuation and Market Impact

The latest surge in stock price is set to add over $50 billion to Netflix’s market capitalization, pushing it beyond $420 billion. With a 12-month forward price-to-earnings ratio of 35.43, Netflix’s valuation is significantly higher than competitors like Disney, whose ratio stands at 19.19.

Netflix’s dominance is reflected in its market worth, which now exceeds the combined valuations of Disney, Comcast, Paramount, and Warner Bros Discovery.

Revenue and Future Projections

For the full year, Netflix projects revenue of up to $44.5 billion, a 14% increase year-over-year, with an operating margin of 29%. The company’s strategic focus on financial metrics like revenue and profit marks a shift away from its historical emphasis on subscriber growth.

Additionally, Netflix announced this will be the final time it reports quarterly subscriber numbers. The management aims to guide investors towards prioritizing broader performance metrics such as revenue and profitability.

Stock Performance and Analyst Outlook

Shares of Netflix closed at $869.68 on Tuesday and surged by 15% in premarket trading on Wednesday. At least 24 analysts have raised their price targets for Netflix, bringing the median target to $1,025, according to LSEG data.

With new seasons of hit shows like Stranger Things and Wednesday slated for release in 2025, along with the recent addition of WWE RAW, Netflix’s content slate is expected to drive further engagement and growth.