Gary Black has credited Netflix Inc.’s NFLX fourth-quarter performance to its live sports strategy, original content, and price hike that saw minimal customer attrition.
What Happened: The Future Fund LLC managing partner took to X on Wednesday and highlighted Netflix’s ability to attract massive audiences with its live sports and entertainment offerings.
“$NFLX (+10.5% AH) crushed 4Q net streaming adds (+18.9M vs +9.2M est) behind the strength of live sports and Squid Games 2,” he stated.
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Black noted that the Mile Tyson–Jake Paul fight and Beyoncé’s Christmas show as pivotal in delivering 18.9 million net subscriber adds, more than double the expected 9.2 million.
“When you have 65 million people go to Netflix for the Tyson-Paul fight and 25 million for Beyoncé’s halftime show, it was clear Netflix was going to get huge net subscriber adds,” Black said.
The prominent investor also pointed out that Netflix’s 14% price increase contributed significantly to its revenue growth while maintaining low customer attrition.
Why It Matters: Netflix’s fourth-quarter results have been described as one of the best in the company’s history.
The streaming giant brought its total paid memberships to 301.63 million compared to 290.9 million estimated. It also reported $10.25 billion in revenue, beating the expected $10.11 billion, and an EPS of $4.27, exceeding the projected $4.19.
However, Netflix’s first-quarter 2025 guidance slightly missed expectations, with forecasted revenue of $10.42 billion (vs. $10.48 billion expected) and EPS of $5.58 (vs. $6.01 expected).
Analysts have adjusted their price targets for Netflix, with Macquarie analyst Tim Nollen raising the target from $965 to $1,150, and KeyBanc analyst Justin Patterson increasing it from $1,000 to $1,100.
Netflix has also surpassed the combined market cap of entertainment giants like Walt Disney Co. DIS, Paramount Corporation PARA and Comcast Corporation CMCSA.
Price Action: Black predicted a 20% upside for Netflix on Wednesday. During regular trading, the stock gained 9.69%, though it edged down 0.49% in after-hours trading.
Despite the slight after-hours dip, NFLX has delivered impressive gains this year, rising 7.59% year-to-date and an astounding 96.41% over the past 12 months, according to data from Benzinga Pro.
Netflix currently has a Relative Strength Index (RSI) of 67, indicating that the stock is in neutral territory.
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