J.P. Morgan analyst Doug Anmuth reiterated an Overweight rating on Netflix, Inc.
The analyst writes that the company's shares are outperforming the SPX, thanks to 2025 revenue growth outlook of 12% to 14% (reported) and 14% to 17% (FX-neutral), strong content slate, and leadership position in the streaming platform.
Anmuth previously noted that Netflix is well-positioned to withstand macroeconomic challenges on strong user engagement (around two hours per household per day) along with its affordability and high entertainment value.
He also emphasized that the low-cost ad-supported tier ($7.99/month in the U.S.) enhances accessibility, making the service appealing to a broad audience.
The analyst says that with Netflix no longer reporting subscriber figures, market attention is expected to shift toward revenue growth, with projections appearing reasonable ahead of first-quarter earnings in April.
Anmuth projects revenue expansion in 2025 on high engagement, organic subscriber gains, and ARM lift following recent price adjustments in the U.S. and U.K., which could generate over $2 billion in additional annual revenue.
Furthermore, the weaker U.S. dollar since fourth-quarter earnings may contribute around ~140bps to revenue, with ~75%-80% expected to benefit operating income, adds the analyst.
Also, the analyst expects the street to focus on Netflix's advertising sector, as Netflix Ads Suite is set to launch in the U.S. in April.
Additionally, the analyst anticipates an updated disclosure on ad-tier monthly active users (MAUs), likely exceeding 100 million, along with the expansion of first-party ad technology into international markets and confirmation of a second NFL Christmas Day game this year.
Going forward, Anmuth estimates Ad Tier subs to be 60 million+ by the end of 2025 and Advertising revenue (ex-subscription) to be $3.2 billion in 2025 (vs. $1.4 billion in 2024).
Also, the analyst remains optimistic about Netflix's 2025 content lineup, highlighting key releases such as The Residence, Harlan Coben's Caught, Devil May Cry, The Clubhouse: A Year with the Red Sox, Black Mirror Season 7, and You Season 5.
Investors can gain exposure to the stock via T-Rex 2X Long NFLX Daily Target ETF
Price Action: NFLX shares are up 0.83% at $968.28 at the last check Monday.
