Price Prediction: Netflix Has 140% Upside Despite the Post-Earnings Dip
Following a Q2 earnings report that sent Netflix stock down to $74.35, 24/7 Wall St. rates the company a Buy with a $178.11 price target, implying 140% upside over 12 months. The analysis highlights Netflix's strong 33% operating margin, which doubles Disney's, and its growing ad-supported tier, which now captures over 60% of new sign-ups. Ad revenue is projected to reach $3 billion. Despite a 33% drop in free cash flow to $1.53 billion, management attributes this to front-loaded content amortization and expects moderation in H2. Risks include decelerating revenue growth, rising capex, and a $1 billion debt maturity. The article also compares Netflix favorably to Disney and Spotify, noting that investors pay up for scaling subscription platforms.
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