nflx Shares Dip 2.5% Despite 16% Revenue Growth, Analysts Raise Price Targets

Netflix's second-quarter results have drawn mixed reactions from Wall Street, with analysts pushing up their stock price targets and increasing forecasts, though the stock exhibited muted movement. Despite surpassing some key targets for the latest period and boosting its full-year 2025 financial outlook, the streamer’s results fell short of elevated investor expectations, leading to a nuanced stock reaction. After closing Thursday’s trading session up 1.9 percent leading into the earnings report, Netflix shares were down 2.5 percent before the market opened on Friday.

Attention is now shifting to Netflix's anticipated performance in the latter half of the year. Analysts are particularly focused on a slew of content debuting over the coming months and growth in the advertising tier, key points discussed by management including co-CEO Ted Sarandos. Analyst Laurent Yoon from Bernstein maintained a “buy” rating with a $1,390 stock price target, noting that Netflix reported an impressive 16 percent year-over-year revenue growth for the quarter but slightly missed heightened buy-side expectations. Despite the raised full-year revenue and earnings guidance, Yoon remarked that the stock gave back its intra-day gains in after-hours trading, leaving room for reassessment of future outlook.

William Blair's Ralph Schackart reiterated his “outperform” rating, expressing positive sentiment despite describing expectations as particularly high heading into the quarter. With Netflix shares up 42 percent year-to-date, Schackart acknowledged some disappointment with revenue guidance missed due to currency factors but remains optimistic about Netflix's market position with expectations of continued strong performance in upcoming quarters.

Several analysts have increased stock price targets following the recent even results. MoffettNathanson's Robert Fishman raised his stock price target by $100 to $1,400, motivated by the company's robust content calendar and the monetization of its ad tier through the in-house Netflix Ads Suite. Evercore ISI's Mark Mahaney set an “outperform” rating and increased his target to $1,375, citing impressive ex-foreign exchange revenue growth and record operating margins largely due to content cost leverage.

Mahaney noted stable revenue growth across all regions, with an acceleration in U.S./Canada growth and remarked on disclosures that reflect steady engagement growth, a broad global content appeal, and extremely diverse content offerings. Guggenheim Securities' Michael Morris increased his target by $50 to $1,450 as well, emphasizing stronger upcoming engagement growth and the strategic importance of local content partnerships such as the TF1 agreement in France.

Several analysts echoed positive outlooks, including Brian Pitz at BMO Capital Markets, who foresees an attractive content slate supporting member growth and smooth advertising ramp-up. TD Cowen's John Blackledge echoed this optimism, forecasting enhanced growth in the second half, driven by returning hits and a significant ad revenue boost.

CFRA Research's Kenneth Leon kept his “strong buy” rating with a premium valuation target, highlighting Netflix's competitive edge in global streaming, aided by advertising shifts from linear networks. Pivotal Research Group's Jeffrey Wlodarczak, presenting the highest stock price target at $1,600, emphasized Netflix's extensive content offerings poised to drive subscriber growth.

Experts beyond Wall Street have described Netflix's operations as effectively streamlined, continuing to attract subscribers while generating successful shows. PP Foresight analyst Paolo Pescatore noted Netflix's advertising ambitions and its strong position compared to competitors, supported by potent data insights for brands and advertisers. KPMG's Scott Purdy additionally suggested Netflix's standout content ensures considerable engagement and potential monetization opportunities, with possible AI advantages to enhance customization and ad-supported models thriving.

Netflix's second-quarter results, while not overwhelmingly surpassing expectations, have sustained strong financial outlooks for analysts and suggest continued robust performance going into the second half, driven by rich content offerings and advertising growth strategies.