Netflix's Knockout Strategy: Paul Vs. Tyson Bout To Help Propel Projected 23M Net Adds In 2024, Says Analyst

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Netflix Inc (NASDAQ: NFLX) stock is up 100% over the past year. Netflix's business strategy decisions and execution have proven effective, leading to revenue and margin expansion in recent years. The stock is part of the "Enormous 8′ stocks.

The Netflix Analyst

JPMorgan analyst Doug Anmuth had an Overweight rating on Netflix stock with a price target of $610.

The Netflix Thesis

Anmuth remained positive on Netflix's ability to accelerate revenue growth in 2024, expand margins and drive a multi-year FCF ramp. Netflix leads the disruption of linear TV, positioning itself as a key beneficiary and driver of this transformative shift.

According to Anmuth, Netflix was strategically positioned to capitalize on several key initiatives driving significant revenue growth and market expansion:

  • Ramping Up Ad Tier Monetization: With more than 23 million global monthly active users (MAUs) on its ad-supported tier, Netflix is prioritizing scale expansion, aiming for it to become a major revenue driver by 2025.
  • Accelerating Revenue Growth and Pricing Power: Anticipating a balanced revenue mix between subscriber growth and advertising revenue per member (ARM), Netflix expects a positive impact from recent price increases in key markets like the U.S., U.K. and France. Strategic pricing moves, including the introduction of the $6.99/month ad tier in the U.S., are set to strengthen revenue streams.
  • Expansion into Sports Content: Netflix's foray into sports content diversified its offerings and broadened its audience base. Partnerships with entities such as Most Valuable Promotions (MVP) for streaming events like the Jake Paul and Mike Tyson boxing match scheduled for July 20 illustrated Netflix's commitment to engaging content. This expansion offered opportunities for lucrative advertising deals, further boosting revenue growth.
Anmuth also highlighted initiatives like Paid Sharing, which was expected to enhance subscriber base and generate high-margin incremental revenue.

These strategic endeavors aligned with Netflix's goal of sustaining growth and cementing its status as a streaming industry leader.

NFLX Price Action: Netflix stock was trading up 2.37% at $620 at time of publication Monday.