Netflix stock sees new peak amid high hopes for ‘Squid Game’ return
The company, widely seen as the winner of Hollywood’s streaming wars, saw its stock rise nearly 10% and was set to add more than $28 billion to its market value of about $295 billion, if gains hold.
Netflix shares reached an all-time high on Friday, driven by investor optimism that its strong content lineup will sustain subscriber growth even as the momentum from its password-sharing crackdown begins to fade.
The streaming giant, often regarded as the leader in Hollywood’s streaming wars, saw its stock surge nearly 10%, potentially adding over $28 billion to its market value of approximately $295 billion if the gains persist.
Netflix exceeded expectations for quarterly subscriber growth by more than 1 million users and predicted even higher sign-ups in the last quarter of the year, boosted by the return of the popular South Korean drama Squid Game.
In addition to subscriber growth, the company’s profit and revenue beat forecasts, reinforcing its efforts to shift investor focus toward financial performance amid what analysts expect to be a slowdown in new subscriptions following the success of its password-sharing crackdown.
The 5.1 million new subscribers Netflix added in the third quarter fell short of the 8.76 million it gained during the same period last year.
“The third quarter confirmed the slowdown in subscriber growth we expected, but Netflix still has opportunities to enhance its financial performance,” said Matthew Dolgin, an analyst at Morningstar.
One area of focus is price increases. After raising prices in Japan, the Middle East, Africa, and parts of Europe, Netflix recently extended hikes to Italy and Spain, with analysts anticipating a similar move in the U.S. next year.
“Netflix didn’t announce a price hike directly but hinted that higher engagement gives them room to increase prices,” analysts at Bernstein noted.
Progress was also seen in the ad-supported subscription tier, which accounted for more than half of new sign-ups in markets where it’s available. However, Netflix doesn't expect advertising to become a major growth driver until 2026.
Following the results, at least 20 analysts raised their price targets for Netflix, increasing the median target from $706.38 to $760, according to LSEG data.
Netflix shares are currently trading at 30.4 times their 12-month forward profit estimates, compared with Disney’s 18.5 and Comcast’s 9.65.
This year, Netflix’s stock has climbed about 41.2%, while Disney shares have risen 6.9%, and Warner Bros. Discovery has fallen 31%.
Netflix is banking on a strong content slate to attract more subscribers, including the next Knives Out film, a new season of Stranger Things, and two live National Football League games on Christmas Day.
“Legacy media companies are hemorrhaging money, giving Netflix the edge in content creation as rivals struggle to allocate more capital,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
