Netflix Inc. (NASDAQ: NFLX) is once again back in record territory, and it doesn’t look like it plans on slowing down anytime soon. The streaming giant has now fully recovered from April’s correction, hitting a fresh high last week just above $1,260. That puts shares up nearly 50% in the past two months alone and more than 600% over the past three years.
A rally of that scale can often have analysts urging some caution, at least in the near term, but not this time. Since the start of the month, Netflix has received two fresh price target hikes, both of which point to further upside even after this monster run. The stock may be taking a short breather this week, but everything from sentiment to fundamentals continues to point to further gains this summer.
Analysts Keep Raising the Bar
UBS Group was the latest to raise its target, boosting it to $1,450 from $1,150 in a note to clients last week. That came shortly after Jefferies also reiterated its Buy rating and raised its target to $1,400. From current levels, those targets imply another close to a further 20% upside in the near term—not bad for a stock with recent gains of nearly 50% under its belt already.
The team at UBS laid out a case rooted in Netflix’s competitive position, platform engagement, and long-term operating leverage. They highlighted that even in the company’s most mature market, the U.S., Netflix still has the potential to capture much more market share, and they see a long runway ahead for continued subscriber growth and share gains.
Jefferies echoed much of that sentiment. Their analysts pointed to Netflix’s strong content slate, expected price hikes, and surging ad revenue as near-term drivers. They also forecast 20%+ annual EPS growth over the next five years and said they believe Netflix has one of the most favorable long-term catalyst paths of the mega-cap stocks out there.
Fundamentals Still Support Further Upside
It’s easy to be cautious after a rally like this, and no one would blame investors for wanting to take profits after a 600% move in three years. But the fundamentals continue to improve in lockstep with the stock.
[content-module:Forecast|NASDAQ: NFLX]The company has been reporting record revenue prints for many quarters now and is expected to bring in up to $10 billion in annual ad revenue by 2030. Analysts see that coming not only from organic platform growth but from an expanding content offering that includes live sports and broader entertainment verticals. Add in continued gains from last year’s password crackdown, and Netflix looks like a company still in acceleration mode.
Importantly, recent price hikes have stuck. Subscriber churn hasn’t spiked, and the company appears to have built enough value into its platform to absorb further increases, something both UBS and Jefferies noted.
As the ad-supported tier matures and international markets continue to grow, Netflix could continue driving revenue and margin expansion without needing to lean entirely on subscriber growth.
Why This Rally Still Has Legs
Netflix is in rare form right now. It’s outperforming both the broader market and nearly every major tech name, and it's doing so with a solid combination of earnings strength and analyst conviction.
Technically, the chart also supports the bull case, with a run of higher highs and higher lows underpinning the recovery rally since April. While Netflix shares have pulled back slightly from last week’s high, this has also had the benefit of cooling their relative strength index (RSI) from extremely overbought levels to a much more appetizing 60. With investor sentiment clearly showing signs of being back in risk-on mode, don’t be surprised if Netflix’s pullback from last Thursday’s peak is quickly gobbled up into the weekend.
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