Netflix shares rose 5.2% in Friday premarket trading, jumping on the giant streaming provider that has outpaced Wall Street estimates by topping a million new subscriber additions and more sharply seeing ad-supported customer signups for the December quarter.
Thursday, the streaming giant Netflix said it added 5.1 million new streaming subscribers in the third quarter, with its ad-supported service accounting for more than 50% of its sign-ups in countries where it was available.
This is something that people just simply can’t live without, and its latest results can only be a testament to how well this appeal stands the test of time,” said Dan Coatsworth, investment analyst at AJ Bell.
In a statement, Netflix said it expects customer additions for the December quarter—which traditionally is a period marked by improvement in quarter-on-quarter customer addition, following all the merry events that take place in the holiday season—to beat the September quarter. The second season of Korean drama “Squid Game” will drop in late December.
Walt Disney and Warner Bros Discovery shares edged up
“Peers in the legacy media space are losing money hand over fist, meaning Netflix can push its advantage in content creation while others can’t stomach allocating more capital,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
There’s also the ads for 2025 and price increases that have started in some markets to squeeze more from existing subscribers, he said.
At least eight analysts raised their price targets on the stock following results, bringing the median target to $750 from $706.38 according to LSEG data.
While customer additions topped forecasts, the 2.4 million sign-ups were short of the 8.76 million that Netflix gained a year ago.
The company has been attempting to take investors’ focus off subscriber growth toward metrics like revenue increase and profit margins as the pace of subscriber addition slows down.
So far this year, Netflix’s stock has risen by about 41.2%, Disney has been up 6.9%, while Warner Bro has shed about 31%.
