Netflix’s third-quarter results are in, and with them Wall Street’s first verdicts on what they mean for the streaming giant and its stock. Most experts had approached the earnings report with an optimistic outlook, despite some warnings that the company’s increased market value may require some patience before shares continue to rise.

Led by co-CEOs Ted Sarandos and Greg Peters and Chairman Reed Hastings, Netflix ended September with 282.72 million subscribers worldwide. As forecast, quarterly net additions of 5.07 million remained below the same period last year, when the increase was 8.76 million.

Original content released on the streamer in the third quarter is included Emily in Paris season 4, The perfect couple, Beverly Hills cop: Axel F, A Good Girl’s Guide to Murderand the fourth and final season of The Umbrella Academy.

And for the current fourth quarter, management announced late Thursday: “We are pleased to close the year successfully with a great fourth quarter result Squid game Season 2, the Jake Paul-Mike Tyson fight, and two NFL games on Christmas Day.” This led Netflix to forecast that paid net adds would be higher in the fourth quarter than in the third quarter.

All of this led to various analysts sticking with their ratings and several further raising their stock price targets on the streamer. Netflix shares soared more than 6 percent to over $730 in premarket trading on Friday. But again, there have been some warnings that the stock may not be able to continue its run higher.

For example, TD Cowen analyst John Blackledge reiterated its “buy” rating on Netflix shares. After recently raising his price target by $45 to $820, he further increased it following the earnings update $835. “We raised our under-guidance following the third quarter beat, while adjusting revenue, operating income and earnings per share estimates in 2024 and longer-term,” he explained.

Mark MahaneyAnalyst at Evercore ISIalso reiterated its stock rating following the results, in its case at Outperform, and increased its price target, in this case by $25 $775 “After exceeding and increasing third quarter results.”

He also pointed to “key bullish trends” such as “a record operating margin (30 percent) that appears reasonably sustainable,” a fourth-quarter outlook that “implies robust upside potential versus Street sub-estimates – thanks to a super strong Contents list”. and disclosing “several select price increases that we believe more will follow.”

BMO Capital Markets‘ Brian Pitz is another analyst who raised his price target on Netflix shares on Friday, from $770 to $55 $825. It also reiterated its “Outperform” rating in a report titled “Effectively Executing as Ad Monetization Thesis Remains Intact.”

Pitz highlighted several positives, including “a better-than-expected revenue growth forecast of 11 to 13 percent for 2025 (versus BMO’s 11.9 percent)” and his “greater confidence in a 10 percent advertising revenue mix in 2026,” along with the , which he called “best-in-class co-CEOs.” The analyst also argued that Netflix’s estimated $18 billion in content spending in 2025 should “attract additional users/limit churn.” And Pitz concluded: “Netflix remains a key beneficiary of the $150 billion in linear advertising dollars that will shift online (we estimate it will be $20 billion over the next three years).”

Guggenheim analyst Michael Morris He also remains bullish after raising his 12-month stock price target to $735 from $735 $810 before the last earnings update. Following the report, he maintained his “buy” rating on Friday, highlighting a key reason for his bullish stance in the headline of his note: “Expanding content offerings to drive further growth.”

William Blair analyst Ralph Schackart also maintained its “outperform” rating on Netflix on Friday without setting a price target. “Better-than-expected profitability drives full-year margin expectations higher,” he emphasized in the headline of his report. “Margin expansion continues through 2025.”

His overall conclusion: “We remain optimistic that both this newer (advertising) tier and paid sharing will provide tailwind for (sales) in the medium term.” Overall, Netflix remains well positioned to remain a long-term streaming winner.” He also argued that planned subscription price increases “will ultimately flow through the model to satisfy investors.”

Central Research Group analyst Jeff Wlodarczak continues to be the biggest Netflix bull on the Street, further raising its financial estimates and stock price target to a high of $900 on Friday $925 and reiterated his buy recommendation. “This is what winning looks like,” was the title of his report.

“Netflix reported another strong quarterly result with third-quarter subscriber growth slightly above consensus, third-quarter revenue growth above forecasts… much better-than-expected third-quarter free cash flow, and 24-year revenue and higher Operating margin forecast for free cash flow,” the analyst emphasized. “In addition, management provided strong revenue and operating income growth forecasts for 2025, which were exactly in line with our expectations and consensus expectations, although we believe the operating income growth forecast will likely prove to be conservative.”

Wlodarczak concluded: “We continue to expect Netflix to be able to generate solid subscriber growth and ARPU growth (price increases and further advertising expansion will be partially offset by lower ARPU in developing markets), leading to Solid sales growth with continued increasing margins, a strong result.” Combo.”

Laurent YoonAnalyst at amberremains more cautious than others with a “market perform” rating, but raised its share price target by $155 $780. “Smooth sailing from here?” he asked in the title of his Friday report.

“There was some concern about net subscriber numbers in the third quarter versus a softer content slate and overlap in paid sharing efforts,” he noted. “User growth was indeed disappointing – particularly due to Latin America – but the worst fears have now been overcome and forward-looking comments have been encouraging.”

Finally, Yoon summarized his current take on Netflix stock as follows: “The most common question we received about Netflix was whether the valuation is ‘expensive.'” Given the updated guidance and confidence around 2025 and the implied We see further upside potential in figures for year 26.” And he emphasized: “We cannot imagine a realistic bear scenario in the short term and our sentiment remains the same.” Happy streaming.”

In contrast, Benchmark analyst Matthew Harrigan remains a big Netflix bear and is sticking with its “sell” rating even as it raises its stock price target by $10 to $10 $555. “Undeniable streaming excellence is overrated in the momentum market, especially as the benefits of paid sharing mature,” he summarized his thesis in the headline of his report.

“In the medium term, although probably not in the short term, risks to membership growth could trend downward compared to our forecast,” he warned. “Benchmark’s valuation and underlying forecast recognize significant growth while accounting for increasing competition in video streaming and the ever-increasing diversion of consumer activity to other media (TikTok, AR, short YouTube videos, etc.). long-form video content, even on Netflix itself.” also adapts to this environment.”

Moffett Nathanson analyst Robert Fishman has clarified the conflicting views on where Netflix and its shares currently stand. “It was an undeniable blockbuster success for the company that famously sent Blockbuster to its grave,” he wrote. “This was done in the face of a content list impacting the strike.” All while increasing its profit margins.

“However, with much of the subscriber growth appearing to be driven by improved monetization of an existing user base, we question whether the momentum can continue next year,” he warned.

Yes, there’s still the growth lever of the company’s still-developing advertising business. “The other lever available to the company is pricing. While it is likely that the company still has room for growth here, stagnant total view time per subscriber may also mean stagnant growth in pricing power,” Fishman noted. “The company has reported that the time spent per ‘member in the owner households’ (i.e. excluding users who have previously shared passwords) has increased compared to last year, but it is difficult to say to what extent the engagement of these password dies Shareholders were included in the value equation of the paying subscriber.”

What does it all mean? “With an estimated cash flow return of 4 percent in 2026, Netflix stock is enormously expensive for a company whose own forecast implies a slowdown in sales through 2025 (from 15 percent this year to growth of 11 to 13 percent),” Fishman emphasized. “The company trades at a higher price/free cash flow multiple (27.9x) than many other large technology companies, including some with faster growth.” One of its charts, for example, showed Meta at 24.9 -x, Amazon with 20.5x and Snap with 19.9x.

Netflix’s latest results drew renewed interest beyond traditional Wall Street analysts. “We estimate that Netflix now accounts for nearly 10 percent of total spending on video services in the United States,” he wrote Madison and Wall Rector Brian Wieser in a note. “This compares to approximately 8 percent of total time spent watching content, suggesting that consumers place a relatively higher value on Netflix compared to alternatives.”

He also highlighted other advertising trends. “In the last quarter, 50 percent of signups in advertising markets chose the advertising plan, which represents an acceleration from the last published figure of 40 percent in each of the first quarter of 2024 and the fourth quarter of 2023,” the expert wrote. “For context on how many households subscribe through the ad-supported tier, our analysis of Antenna’s data suggests that 12 percent of U.S. subscribers – about 7 percent of U.S. TV households – have this plan, which is roughly double corresponds to the previous year. “As far as is accurate, growth from ad-supported members accounts for almost all of the service’s growth in the United States since the tier was introduced nearly two years ago.”