Netflix (NASDAQ:NFLX) shares rose 3.4% on Thursday on the back of the optimism about the streaming giant's ad-supported subscriber tier.
The company's recent update hints at an acceleration in the adoption of the ad-tier, as indicated by comments made at CES. The management said that its ad-tier recently reached 23 million global MAUs, up from 15 million from the last update in October 2023.
As a result, analysts at Citi see potential for further acceleration in ad-tier subscribers and maintain a neutral rating with a price target of $500.
“While initially slow out of the gate, this recent update suggests Netflix’s ad-tier has seen an acceleration in adoption. We estimate the firm is now pacing toward ~16 million ad-tier subs per year,” analysts said in a note.
“We are encouraged by the recent acceleration and see scope for ad-tier subs to further accelerate All told, we continue to estimate Netflix will add ~25 million ad-tier subscribers in 2024.”
Analysts expect the company will reach ~82 million ad-tier subscribers by 2028. The firm just recently downgraded the stock's rating to Neutral from Buy.
Today’s high marks the fresh 52-week high for NFLX.