Netflix shares rise 3.5% on upbeat management comments

Netflix shares rise on positive comments from management, Citi

Netflix shares experienced a 3.4% rise on Thursday, thanks in part to positive comments from its management and a favorable outlook from Citi. The streaming giant’s stock growth can be attributed to the increasing optimism surrounding its ad-supported subscriber tier.

Accelerating adoption of ad-tier drives Netflix’s stock growth

According to recent updates, Netflix has witnessed a significant acceleration in the adoption of its ad-tier, as indicated by comments made by the company’s management at the CES event. The number of global monthly active users (MAUs) for the ad-tier has surged from 15 million in October 2023 to 23 million. This increase has fueled investor confidence and contributed to the rise in the company’s stock.

Citi maintains neutral rating on Netflix with optimistic price target

Citi, in view of Netflix’s positive performance and the growth potential of its ad-tier, has maintained a neutral rating for the company’s stock. The investment bank has assigned a price target of $500, signaling the potential for further growth in the coming months.

Analysts foresee further acceleration in Netflix’s ad-tier subscribers

Citi analysts are optimistic about the future of Netflix’s ad-tier and anticipate a continued acceleration in subscriber numbers. The recent surge from 15 million to 23 million MAUs suggests that the ad-tier is gaining traction. The analysts estimate that Netflix will add approximately 16 million ad-tier subscribers each year, with a forecast of 25 million new subscribers in 2024.

Netflix projected to reach 82 million ad-tier subscribers by 2028

Looking ahead, market analysts predict that Netflix’s ad-tier will continue to expand rapidly, projecting a total of 82 million ad-tier subscribers by 2028. This projection highlights the potential long-term growth prospects within the ad-supported segment for Netflix.

In conclusion, positive comments from management and optimistic outlook from Citi have contributed to the rise in Netflix’s stock. The accelerating adoption of the company’s ad-tier, as shown by the increase in global MAUs, indicates a promising future for Netflix’s ad-supported subscriber base. With the potential for further growth in ad-tier subscribers, Netflix is set to maintain its strong position in the streaming industry.