- Macquarie analyst Tim Nollen upgraded Netflix, Inc (NASDAQ:NFLX) to Neutral from Underperform with a price target of $230, up from $170, as he gained confidence in Netflix’s ability to grow through advertising.
- Nollen is now more confident in the company’s longer-term upside potential.
- He estimates Netflix with ads could generate up to $3.6 billion in U.S. and Canada sales by 2025 and $8.5 billion globally, adding $2 billion in total incremental revenue.
- Nollen assumed that if Netflix were to ramp up its international ad sales efforts that quickly, considering the ad tier attracts an additional 10% to its sub base in EMEA, LatAm, and APAC.
- While this seems like a large number, coming from zero, but assuming a lower subscription price for the service and the assumption that a third of all users migrate to the advertising tier, it equates to a total incremental revenue figure of $1.1 billion, only a 7% increase from estimates before factoring in ad growth.
- While Nollen’s assumptions appear aggressive, they demonstrate both the ad opportunity and corresponding offset to ARPU. In his model, international ad tiers only boost incremental revenue by $1 billion or 4%.
- He kept his 2022E-24E estimates intact but raised the 2025E estimates.
- Price Action: NFLX shares traded higher by 4.73% at $228.70 on the last check Wednesday.
- Photo by Tumisu via Pixabay
Nvidia Insiders Continue To Sell Shares After Hitting All-Time Highs, $1 Trillion Market Cap: What Investors Should Know
One of the best-performing stocks of the year is Nvidia Corporation (NASDAQ: NVDA), a semiconductor company seeing strong interest in its artificial intelligence capabilities. While shares have soared, several insiders are cashing out.
