Netflix (NFLX) stock is one of the best S&P 500 stocks Friday after the streaming giant beat top- and bottom-line expectations for its third quarter and issued a strong outlook for its fourth quarter.
In the three months ended September 30, Netflix said its revenue increased 15% year over year to $9.83 billion, driven by a 14% rise in global streaming paid memberships to 282.72 million. Its earnings per share (EPS) were up 45% from the year-ago period to $5.40.
The results topped analysts' expectations. Wall Street was anticipating revenue of $9.77 billion, paid memberships of 282.15 million and earnings of $5.12 per share, according to CNBC.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
For the fourth quarter, Netflix said it anticipates revenue growth of 15% and paid net additions to be higher than in the third quarter. Given this outlook, Netflix is on pace to grow revenue by 15% for the full year, which is the high-end of its previous guidance for revenue growth of 14% to 15%.
"We're pleased that we've reaccelerated our growth and, as we head into 2025, we expect to deliver solid revenue and profit growth by both improving our core series and film offering while investing in new growth initiatives like ads and gaming," NFLX said.
For 2025, the company anticipates revenue in the range of $43 billion to $44 billion, representing year-over-year growth of 11% to 13% from its 2024 revenue forecast of $38.9 billion. Netflix said it expects this growth "to be driven by a healthy increase in paid memberships," as well as an expansion to its average revenue per membership.
Is Netflix stock a buy, sell or hold?
Netflix has outperformed the broader market so far in 2024, up 55% vs the S&P 500's 23% gain. Unsurprisingly, Wall Street is bullish on the blue chip stock.
According to S&P Global Market Intelligence, the consensus recommendation among the 48 analysts covering the Magnificent 7 stock is a Buy. However, the average analyst target price of $745.21 sits at a slight discount to the current share price. It's likely, though, that analysts will increase their price targets on NFLX following the company's strong earnings report.
Financial services firm Needham already hiked its price target on NFLX, raising it to $800 from $700 after earnings while maintaining its Buy rating.
Needham analyst Laura Martin pointed to Netflix's strong Q3 subscriber adds as well as its solid full-year revenue forecast and higher 2024 free cash flow guidance of $6 billion to $6.5 billion as things she liked in the print. These are all catalysts that can boost NFLX stock's share price down the road, she adds.
Related Content
- If You'd Put $1,000 Into Netflix Stock 20 Years Ago, Here's What You'd Have Today
- Analysts' Top S&P 500 Stocks to Buy Now
- Stock Picks That Billionaires Love
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Travel trends you can expect this summerThe Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
What's Next for Stocks After a Chaotic SpringA chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
My First $1 Million: Events Industry CEO, 65, Northern New JerseyEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Stock Market Today: Investors Look on the Bright SideA generally good week closes on another positive note, as investors, traders and speculators look for fresh catalysts.
