Perhaps Netflix’s stock has become a bit too costly for some people. At first, some critics might have been hesitant to support the second season of “Squid Game.” However, analysts say the platform’s supremacy in the streaming battles is still in place ahead of Tuesday’s fourth-quarter results.
Its plans to remain that way this year will continue to revolve around live broadcasts, whether they be from the NFL, WWE, or boxing. However, so will things like price rises and advertisements that viewers may not be as excited about.
In a recent report, analysts from JPMorgan stated, “We believe 2025 revenue will be supported by healthy organic [and] secular growth, ramping advertising contribution, [and] price increases.”
“Netflix is increasingly focused on sports entertainment, events, [and] shoulder content, [and] we expect a bigger push into live sports as negotiating leverage shifts in NFLX’s direction,” they stated afterwards.
Following a nearly 80% increase in its stock price over the last 12 months, Netflix (NFLX) is set to release its earnings as the Trump administration takes office, Hollywood and its competitors face challenges. Analysts have remained optimistic despite the stock’s slight decline over the past month.
According to a research note released last week by Wedbush analysts, “Netflix has established a virtually insurmountable lead in the streaming wars,” “Netflix can retain its moat while competitors try to replicate its business model.”
“Even as Netflix has lapped the password-sharing crackdown, we expect its advertising tier to drive revenue growth for several years,” they said. “So far, the introduction of the ad tier has limited churn, lowering pressure on adding new subscribers, with at least 30 million accounts converting to the ad tier in the past six months.”
They predicted that by 2026, Netflix’s ad-supported strategies will be the primary factor driving its sales growth as the streaming service expands its live event offerings, improves its advertising offerings, and forges new alliances.
However, a more challenging foreign currency environment may have an impact on financials, according to JPMorgan analysts. Additionally, as investors strive for profits, the entertainment sector as a whole has retreated. After the writers’ and performers’ strikes in 2023, finding work is still more difficult. It will take time to determine the entire impact of the flames that have displaced thousands of people in Los Angeles this month on the industry.
The business has consolidated in an effort to boost its bottom line, a trend that some analysts predict will continue under President-elect Donald Trump. However, other analysts anticipate that the impact will be minor despite Netflix’s competitors’ efforts to expand.
In a report last month, Oppenheimer analysts stated that “even if Hollywood can consolidate under Trump DOJ/FCC, this would just mean less competition for content creators and better NFLX margins.”
