Buy the Surge in Netflix Stock After Record Subscriber Growth?

Reporting strong Q4 results after market hours on Tuesday, Netflix NFLX stock soared +9% in today's trading session. Hitting a 52-week peak of $999 a share, NFLX had surged over 100 points before cooling off, with its previous closing price at $869.Serving as a further catalyst to its impressive top and bottom line figures, Netflix was able to crush Wall Street’s expectations for subscriber growth. Image Source: Zacks Investment Research Netflix’s Strong Q4 Results Netflix reported Q4 sales of $10.24 billion, topping estimates of $10.11 billion and spiking 16% from $8.83 billion in the comparative quarter. More impressive, Q4 earnings soared over 100% to $4.27 per share compared to EPS of $2.11 a year ago. Exceeding Q4 expectations of $4.20 per share, Netflix has surpassed the Zacks EPS Consensus in each of its last four quarterly reports with an average earnings surprise of 7.17%.The streaming king ended fiscal 2024 with total sales increasing 16% to $39 billion. Annual earnings climbed 65% to $19.83 per share versus EPS of $12.03 in 2023. Netflix also highlighted that its full-year operating income exceeded $10 billion for the first time as operating margins increased six points to 27%.    Image Source: Zacks Investment Research Netflix Subscriber GrowthAttributed to its ad plan service which offers a lower price point for consumers, Netflix added a record-breaking 19 million subscribers during Q4. Adding a mind-boggling 13 million more subscribers than anticipated, Netflix’s ad plan accounted for 55% of sign-ups in countries where the service is provided. Overall, Netflix's total subscribers have now topped 300 million.Staying firmly ahead of competitors, the next closest streaming service would be Disney+ with Disney DIS thought to have around 230 million total subscribers when including its Hulu and ESPN+ services.Furthermore, Netflix remains the clear leader in original content, stating that during 2024 it had more number 1 shows in the weekly streaming top 10 than all other streamers combined.   Netflix’s Positive Guidance Raising its revenue guidance by $0.5B, Netflix now expects FY25 sales in the range of $43.5B-$44.5B. This came in above the current Zacks Consensus of $43.44B (Current Year Below) or 11% growth with Netflix’s forecast equating to 12-14% growth.Based on Zacks estimates, Netflix’s top line is projected to expand another 11% in FY26 to $48.27 billion. Even better, Netflix is expected to post 18% EPS growth this year with annual earnings forecasted to increase another 19% in FY26 to a whopping $28.01 per share.Image Source: Zacks Investment Research Bottom Line There was a lot to like about Netflix’s Q4 report, but for now, its stock lands a Zacks Rank #3 (Hold) after a very sharp post earnings rally. That said, many analysts have started to raise their price targets for NFLX to over $1,100 a share. Considering such, it wouldn’t be surprising if a Zacks buy rating is on the way given that earnings estimate revisions are likely to trend higher in the coming weeks.  Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Netflix, Inc. (NFLX): Free Stock Analysis Report The Walt Disney Company (DIS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks