Netflix's Streaming Dominance Just Got a Big Boost: MoffettNathanson Upgrades Price Target to $1,150

The streaming landscape has long been a battleground, but Netflix (NFLX) continues to prove its resilience. On the heels of its first-quarter 2025 earnings, research firm MoffettNathanson raised its price target for the streaming giant to $1,150 per share, up from $1,100, signaling renewed optimism about Netflix’s ability to monetize its massive user base and dominate global entertainment. This upgrade underscores a critical inflection point for Netflix, as it shifts focus from subscriber growth to margin expansion, ad revenue scaling, and content-driven engagement.

The Catalyst: Q1 2025 Earnings and Strategic Shifts

Netflix’s Q1 2025 earnings report marked a pivotal moment. The company reported $10.5 billion in revenue, slightly ahead of estimates, and an operating margin of 31.7%, a significant improvement over the prior year’s 27.3%. Importantly, Netflix abandoned quarterly subscriber growth metrics, a move analyst Robert Fishman of MoffettNathanson called “strategic,” emphasizing instead its “flywheel” of content, pricing, and ad monetization.

Why the Price Target Jumped to $1,150

MoffettNathanson’s upgrade hinges on five key pillars:

1. Advertising Revenue Growth:
   The firm forecasts Netflix’s ad revenue to hit $6 billion by 2027 and $9.6 billion by 2030, driven by its ad-supported video-on-demand (AVOD) tier and in-house ad tech advancements. Programmatic bidding and AI-driven targeting, set to launch by 2026, will further boost this trajectory.

2. Margin Expansion:
   Operating margins are projected to rise to 29.5% in 2025 and potentially 40% by 2030, mirroring traditional broadcast networks. This reflects Netflix’s ability to leverage its 302 million global subscribers to spread content costs while raising prices in markets like the U.S., where revenue per hour viewed lags peers.

3. Content and Engagement:
   Hits like Adolescence and The Night Agent fuel engagement, while experiments with live events (e.g., WWE’s Monday Night Raw) and password-sharing crackdowns drive retention. Fishman notes Netflix’s “consumer surplus”—its capacity to raise prices further—remains untapped.

4. Global Scale and Pricing Power:
   With less than 10% of TV viewing hours and 6% of consumer ad spend, Netflix has “hundreds of millions of untapped users”. Its dominance in international markets, particularly Asia and Latin America, positions it to capitalize on underpenetrated regions.

5. Defensive Stock Appeal:
   Analysts highlight Netflix as a “recession-resistant” holding, with low churn rates and a sticky subscription model. Its stock outperformed FAANG peers in 2025, rising 9% year-to-date against broader market declines.

Risks and Challenges

While bullish, MoffettNathanson acknowledges risks:
- Macroeconomic Headwinds: Ad spending could stall if global growth slows, though Netflix’s ad-tech rollout aims to offset this.
- Execution Risks: Scaling ad revenue and balancing content budgets with margin goals requires flawless execution.
- Competitor Moves: Rivals like Disney+ and HBO Max could poach subscribers with exclusive content or pricing strategies.

Stock Price Outlook: A Bullish Roadmap

The $1,150 price target aligns with broader analyst consensus. BMO Capital and Pivotal Research have even higher targets ($1,200 and $1,350, respectively), reflecting confidence in Netflix’s long-term narrative.

Conclusion: Netflix’s Path to $1,150—and Beyond

MoffettNathanson’s upgrade to $1,150 is no fluke. Netflix’s shift from subscriber counting to “more monetization, more margin” has already yielded results: operating margins hit 31.7% in Q1 2025, and ad revenue is on track to double by 2030. With a global audience of 302 million and a content library that drives unmatched engagement, Netflix is well-positioned to capitalize on its “flywheel”.

The $1,150 target assumes Netflix can scale ad revenue, sustain margin growth, and maintain its content edge. If realized, this would represent a 22% upside from its April 2025 forecasted closing price of $980. While risks like macroeconomic slowdowns loom, Netflix’s defensive profile and first-mover advantage in ad tech make it a compelling bet for investors willing to look past short-term volatility.

In a streaming landscape where winners are increasingly defined by monetization prowess, Netflix’s $1,150 target isn’t just a number—it’s a declaration of dominance.