Netflix Stock Set To Open at New Highs as Earnings Came in Hot

Netflix's stock price (NASDAQ: NFLX) is making significant gains in extended hours trading, up 14.43% in the pre-market. The current price of $995.20 would reflect a huge new high for the stock, which previously stood at $941.75, and comes following the release of its impressive fourth-quarter financial results.

In the fourth quarter of 2024, Netflix added a record 18.91 million net subscribers, marking a 44% increase compared to the previous year. This significant growth in subscriber numbers highlights the company's successful strategies in expanding its global footprint and enticing more viewers to its platform.

Financially, Netflix reported a fourth-quarter revenue of $10.2 billion, which represents a 16% year-over-year increase. Moreover, the company's earnings per share stood at $4.27, surpassing the consensus estimate of $4.20. These figures demonstrate Netflix's continued strength in generating revenue and profit, despite increasing competition in the streaming sector.

Additionally, the Netflix board has approved a $15 billion stock buyback program, which reflects the company's confidence in its growth prospects and its commitment to returning value to shareholders. This move is likely to bolster investor sentiment further as it demonstrates management's confidence in the underlying business fundamentals.

Netflix has also implemented a strategic price increase in several key markets, including the U.S., Canada, Portugal, and Argentina. In the U.S., the ad-supported tier is now priced at $7.99 per month, whereas the premium plan costs $24.99. These pricing adjustments are expected to enhance revenue streams without significantly impacting subscriber growth.

Advertising revenue has turned into a significant component of Netflix's financial model, with projections indicating it could reach $2 billion. Looking ahead, the company has maintained its revenue projection for 2025 at $43.5 to $44.5 billion, underscoring a stable long-term financial outlook.

Netflix's future growth strategy appears to focus more on enhancing financial performance reporting rather than purely on subscriber numbers. This shift reflects a maturing business model that prioritizes profitability and sustainable earnings growth.