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Netflix’s Surprising Surge: Investors Wonder If Now’s The Time To Dive In?

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Written by Ellis Hobbs Reviewed by Jack Kellogg Fact-checked by Tim Sykes
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Netflix Inc’s stock surged following the announcement of its new, highly anticipated ad-supported tier and impressive subscriber growth in the third quarter. On Wednesday, NETFLIX INC’s stocks have been trading up by 11.14 percent.

Major Movements in the Market

  • The company’s recent stock price saw a significant rise of 10%, catapulting to an impressive $953.13, owing to an unexpected earnings report that shattered forecasts.
  • Beyond astonishing earnings, Netflix announced a record-breaking 18.91M global streaming paid net additions during Q4, their largest ever.
  • Analysts from Macquarie heralded Netflix’s future as bright, raising the price target from $795 to $965, predicting over 33M new subscribers by the end of 2024.
  • Argus marked Netflix as their top communication services pick for 2025, affirming a ‘Buy’ recommendation alongside an ambitious price target of $1,040.
  • The positive momentum is further strengthened as TD Cowen upped their price target from $835 to a stunning $1,000, with a steadfast ‘Buy’ rating.

Candlestick Chart

Live Update At 11:37:38 EST: On Wednesday, January 22, 2025 NETFLIX INC stock [NASDAQ: NFLX] is trending up by 11.14%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Overview of Netflix’s Recent Earnings and Financial Metrics

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Netflix has stamped its authority over the streaming landscape with its fourth-quarter earnings report, presenting financial prowess that caught many by surprise. This period showcased a monumental increase in subscribers, surpassing both market and analyst predictions. With an astonishing 18.91M new subscribers, Netflix continues to set the stage for competitors scrambling to catch up.

A glance at the numbers underlines Netflix’s thriving status. Revenue surged to $10.25B, an impressive jump from the previous year’s $8.83B. The earnings per share soared to $4.27, a remarkable leap from $2.11 year-on-year. With eyes towards the future, Q1 projections anticipate an EPS of $5.58 on $10.42B revenue, nudging slightly below the expected figures.

Netflix may be halting the publishing of specific subscriber numbers, but analysts foresee a bright horizon regardless. The likes of the Mike Tyson fight and NFL Christmas games have proven massive draws, while upcoming series and movie offerings hint at continued growth. What’s interesting here is that alongside sports and entertainment, Netflix is proving to be a significant player in both advertisement revenues and streaming dominance.

More Breaking News

The financial records reflect a positive trend: The firm’s current ratio at 1.1 indicates its well-poised liquidity. Furthermore, key profitability measures like the EBIT margin rests at 25.9%, while the gross margin finds stability at 45.3%. All these metrics point to Netflix being a potent force in the sector, unburdened by excessive debt and backed by solid financial health.

Analyzing Netflix’s Stock Price Movement and Market Reactions

The market echoed with the excitement of Netflix’s substantial climb. Investors and analysts are examining this unforeseen bulla run, rooted strongly in remarkable earnings performance and booming subscriber growth. The company’s ability to pull vast viewership with its stellar lineup, as seen with “Squid Game 2,” “NFL Christmas games,” and more, invites curiosity if this sharp rise is just the beginning of a flourishing trend.

While analysts from Argus and TD Cowen set dazzling price targets at $1,040 and $1,000 respectively, others like Piper Sandler are equally enticed, increasing their estimations to $950. These optimistic evaluations come backed by Netflix’s ad-tier enhancements and live content expansion which both serve as pivotal growth attributes. However, with expectations heightening, Netflix now faces a challenge to retain this vigor amidst rivals vying for a slice of the streaming pie.

Looking ahead, equity enthusiasts might ponder if Netflix’s abundant gains are sustainable or whether a plateau lies ahead. Any slight misstep, even amidst strong current indicators, could affect the stock’s trajectory. Active engagement with subscriber interactions and timely content drops remain crucial to fend off competition’s relentless advancement.

Wrapping It Up: The Market’s Perspective

Recent market motions validate Netflix’s position as a stalwart in streaming entertainment. Record-breaking performances breed fervent trader interest and anticipatory forecasts, with price targets skyrocketing. The company’s robust offerings—from live sports to global series hits—underscore its potential to keep growing in diverse directions.

However, only time will reveal the unfolding narrative. As traders weigh the balance of joining a flourishing journey or treading cautiously lest the bullish run pauses, Netflix’s journey continues to be one of intrigue and volatility. As millionaire penny stock trader and teacher Tim Sykes, says, “Be patient, don’t force trades, and let the perfect setups come to you.” With these financial metrics, news insights, and market strategies alert, the future holds promising prospects yet requires a vigilant eye for navigating potential swings.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”