Benchmark Boosts Netflix Price Target to $720 Amid Strong Execution and Global Scaling

Netflix (NFLX) has been on a roll, and Benchmark is the latest analyst firm to take notice. The firm recently raised its price target for the streaming giant from $555 to $720, citing the company's strong execution and major global scaling advantages. While maintaining a Sell rating on the shares, the analyst tells investors that Netflix is executing significantly better than other media companies, despite the stock appearing overpriced in a momentum market that now appears heavy.



Revenue and profitability growth for Netflix will increasingly depend on pricing and newer initiatives such as the ad-supported tier as paid sharing benefits subside. The ad-supported tier, launched in late 2022, has been a significant revenue driver, attracting budget-conscious viewers and competing with other ad-based streaming platforms. As Netflix phases out its basic ad-free plan in the U.S., customers are given the option to switch to premium tiers or opt for the lower-cost ad-supported alternative, further boosting the average revenue per user (ARPU).

Netflix's content strategy has also played a significant role in driving subscriber growth and engagement. Shows like "Squid Game" have demonstrated the platform's global appeal, with the first season attracting over 142 million households within its first four weeks and contributing an estimated $900 million in impact value. The upcoming second season of "Squid Game" is expected to further boost subscriber engagement and growth. Additionally, Netflix's live sports broadcasts, such as the Jake Paul vs. Mike Tyson boxing match, have shown promise, with the event breaking records and boosting Netflix's market cap by $25 billion.

Netflix's strategic partnerships, such as its recent deal with WWE, are also expected to drive sustained growth and maintain the company's market leadership. The agreement, worth over $5 billion, includes the exclusive streaming of "Monday Night Raw" in the U.S., Canada, the UK, and Latin America, as well as additional countries over time. This partnership is expected to expand Netflix's audience and provide a steady stream of live content, similar to the success of the "Drive to Survive" series with Formula 1.

In conclusion, Netflix's strong execution, global scaling advantages, content strategy, and strategic partnerships have led Benchmark to raise its price target to $720. While the stock may appear overpriced in the current momentum market, Netflix's growth prospects and competitive edge warrant a higher price target. As Netflix continues to expand its offerings and drive growth, the company could reach new milestones, including the ambitious goal of becoming a trillion-dollar company, as predicted by analysts.