Netflix stock rose as much as 13.5% on Wednesday January 22nd as their fourth quarter earnings exceed expectations. Each share is now just under $1,000 per share, and many investors are eager to see the potential growth ahead.
Why did Netflix Do So Well?
Netflix has always been a powerhouse in the entertainment industry, and last quarter announced 18.9 million users. Since most of their revenue and earnings come directly from this user count, it’s no surprise to see this excitement in the stock market. After the company released the Q4 report, James Heaney, an analyst at Jefferies, described the fourth-quarter results as “nearly flawless.”
Notably, the company also gained more subscribers in this quarter than they were expecting to. Some believe this is thanks to the Jake Paul vs Mike Tyson fight, as well as the welcomed return of “Squid Game.” However, Netflix co-CEO Greg Peters has a different perspective. He said “We’ve consistently seen across our history no single title really drives a majority of our acquisition or engagement.”
The entertainment giant plans on betting on itself in 2025 as well. They announced they would buy back $15 billion worth of stock, and projects their revenue for 2025 to be between $43.5 and $44.5 billion. This increase in projected revenue likely comes from Netflix raising their prices. The price of the ad-free plan will increase from $6,99 to $7.99. The ad-free plan will increase from $15.49 per month to $17.99 per month, and the premium plan will increase from $22.99 to $24.99.
What will happen to Netflix in the Future?
Netflix has only gotten stronger over time, and it seems like they continue on growing. They saw quite a bit of growth from airing NFL football games over the holidays, so some expect to see a sports package coming soon. However, in a letter to its shareholders, Netflix said it is not focused on “large regular season sports packages; rather, our live strategy is all about delivering can’t-miss, special event programming.”
While it’s hard to predict everything Netflix will do in the future, they are confident in their business model and their financial future. What do you think will happen to Netflix stock price and performance in 2025? Let us know in the comments.
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