Netflix, Inc. (NASDAQ:NFLX) Released Earnings Last Week And Analysts Lifted Their Price Target To US$1,064

Shareholders of Netflix, Inc. (NASDAQ:NFLX) will be pleased this week, given that the stock price is up 12% to US$972 following its latest full-year results. Netflix reported in line with analyst predictions, delivering revenues of US$39b and statutory earnings per share of US$19.83, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Netflix

Taking into account the latest results, the most recent consensus for Netflix from 45 analysts is for revenues of US$44.3b in 2025. If met, it would imply a decent 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 22% to US$24.77. Before this earnings report, the analysts had been forecasting revenues of US$43.6b and earnings per share (EPS) of US$23.79 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 22% to US$1,064, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Netflix at US$1,494 per share, while the most bearish prices it at US$700. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Netflix's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Netflix to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Netflix following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Netflix going out to 2027, and you can see them free on our platform here.

You can also view our analysis of Netflix's balance sheet, and whether we think Netflix is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.