“Netflix has more levers to grow in 2024,” according to KeyBanc Capital Markets analyst Justin Patterson
Netflix Inc. is reaping the benefits of its clampdown on password sharing and its paid sharing push, say analysts.
Third-quarter revenue growth was boosted by a 9% year-over-year increase in average paid memberships due to the roll out of paid sharing, Netflix NFLX, -2.68% said, also citing the company’s “strong, steady programming” and the ongoing expansion of streaming globally. Speaking during a videoconference call to discuss the results, Netflix Co-Chief Executive Greg Peters said that the company will continue its rollout of paid sharing for the next several quarters.
KeyBanc Capital Markets upgraded its Netflix rating to overweight from sector weight Thursday, citing the company’s growth potential. “Netflix has more levers to grow in 2024,” wrote KeyBanc Capital Markets analyst Justin Patterson in a note released Wednesday. “Paid sharing will likely benefit subs into 2024E.”
“Netflix maintains that its ability to convert paid members is better in the wake of paid sharing,” he added. “The Company believes paid sharing will continue to provide benefits over several quarters, which will create more balanced revenue growth between subscribers and pricing.”
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