Netflix shares went up on Monday after financial experts at MoffettNathanson upgraded their rating of the company and set a high price target of $1,100.
Analyst Robert Fishman believes Netflix is entering a new phase of growth, thanks to its push into advertising. “Netflix is now building its advertising business, which could bring in strong revenue for years to come,” he explained in a March 17 report.
As a result, Netflix stock climbed $36.75 (about 4%) to $954.75 during early trading on Monday. This comes after Fishman previously suggested on March 6 that Netflix’s efforts to turn password-sharers into paying subscribers might not drive much more growth. However, he now sees a bigger opportunity in combining subscription and ad revenues to boost profits.
“Netflix still has plenty of room to grow. While there will be some added costs in building its ad business, we expect continued investment in content and a rise in earnings,” Fishman wrote.
MoffettNathanson predicts Netflix will make over $6 billion from ads by 2027 and nearly $10 billion by 2030. This shift in focus is in line with Netflix’s decision to stop reporting subscriber numbers in 2025, instead prioritizing revenue and profit growth.
Netflix has already raised prices on some plans, including its ad-supported tier, and is expanding its advertising business further. These changes suggest that the streaming giant is looking beyond just subscriber numbers and betting big on ad revenue for future success.