By Angela Palumbo

Netflix stock continued to rise on Thursday as its financial results allayed one analyst's concern about the outlook for growth in subscribers,

Wolfe Research analyst Peter Supino upgraded shares of Netflix to Outperform from Peer Perform. He set a target of $1,100 for the price, implying a gain of 15% from the closing price of $953.99 on Wednesday.

In afternoon trading, shares of Netflix were up 2.4% Thursday to $977.31, on pace for a record close, according to Dow Jones Market Data. The stock has now risen 75% over the past 12 months.

Supino wrote in a research note late Wednesday that Netflix's fourth-quarter financial results and 2025 guidance "buried our long-standing concerns about a deep slowdown after the 2023-'24 barrage of password sharing interventions."

Netflix introduced strict password-sharing rules in 2022 to stop people in different households from using a single account to watch shows such as Stranger Things and Love Is Blind. This led to a jump in new subscribers, as well as concern among some analysts that the growth would eventually come to a halt.

Netflix's most recent results show otherwise. The streaming company reported better-than-expected fourth-quarter earnings and revenue on Tuesday. It also said it had a net gain of 18.9 million paid subscriptions, during the quarter. Netflix said it was the "biggest quarter of net adds in our history."

Netflix also announced further price increases.

"The company's widening growth strategies, superior scale, and rich cash flow position it to extend its lead in long-form video streaming, which continues to take wallet share from pay-TV -- a $130B revenue category in the US, alone," Supino wrote.

Supino isn't the only analyst who is more optimistic. Macquarie Equity Research analyst Tim Nollen raised his price target to $1,150 from $965 while maintaining an Outperform rating. He wrote in a research note on Tuesday that live events like the Jake Paul and Mike Tyson fight and the Christmas football games helped bring in some of the new subscribers.

Still, Netflix stock isn't cheap. The stock is trading at 38.3 times the per-share earnings expected over the next 12 months.

Monness, Crespi, Hardt & Co. analyst Brian White rates Netflix as Neutral without a price target. He wrote in a note on Wednesday that while Netflix has built a formidable entertainment platform with promising initiatives under way and an expansion into new genres of content, "competition is dynamic, valuation stretched, and the macro fragile."

Write to Angela Palumbo at angela.palumbo@dowjones.com

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January 23, 2025 15:36 ET (20:36 GMT)

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