In a recent note, corporate bond research firm Gimme Credit confirmed Netflix (NFLX) as an Outperform, citing the company’s robust quarterly earnings release. Analysts at Gimme Credit pointed out that Netflix gained over 13 million subscribers in the fourth quarter, marking the highest additions since Q1 2020.
Notably, the subscriber base saw a remarkable 13% increase compared to the previous year, representing the best percentage growth since Q1 2021. Analysts observed that the introduction of paid sharing in Q4 2022 had a muted impact initially but has gained significant traction recently.
Looking ahead, Gimme Credit expressed optimism about Netflix’s future performance. Despite expectations that subscriber growth may not match the fourth quarter, analysts anticipate it will surpass the additions seen in Q1 2023, solidifying Netflix’s position as the “clear winner in the streaming wars, at least for now.”
The outlook for 2024 is positive, with NFLX management providing guidance for a 13% increase in revenue for Q1. Gimme Credit predicts continued strength throughout 2024, projecting a revenue increase of more than 10%. Moreover, the addition of WWE Raw in 2025 is seen as a strategic move that aligns with Netflix’s ambitions in live event programming and expands its global reach beyond North America.
Gimme Credit confidently reaffirms its outperform recommendation, highlighting the 2030 notes trading at a spread of +80 to the 5-year Treasury. In summary, the research firm concludes that Netflix’s momentum is set to persist, making it a compelling choice for investors in the foreseeable future.
Conclusion:
Gimme Credit’s positive outlook on Netflix, fueled by robust subscriber growth and strategic moves, positions the streaming giant as a compelling choice for investors. The forecasted revenue increase and strategic content additions underscore Netflix’s momentum in the evolving streaming landscape.
FAQs:
- What prompted Gimme Credit to confirm Netflix as an Outperform in their recent note?
In their latest note, Gimme Credit highlighted Netflix’s robust quarterly earnings, especially its addition of over 13 million subscribers in Q4.
- How does Netflix’s subscriber growth in the fourth quarter compare to previous periods?
Netflix’s subscriber base saw a remarkable 13% increase compared to the previous year, the best percentage growth since Q1 2021.
- What factors contribute to Gimme Credit’s optimistic outlook for Netflix in 2024?
Gimme Credit anticipates continued strength throughout 2024, projecting a revenue increase of more than 10%, supported by positive management guidance for Q1.
- Why does Gimme Credit consider Netflix the “clear winner in the streaming wars”?
Despite expectations of lower subscriber growth, Gimme Credit believes Netflix will outperform competitors, solidifying its position as the premier streaming platform.
