Netflix Stock Fast Forwards As Subscribers Surge: What's Going On Thursday?

Netflix Inc NFLX shares are trading higher Thursday following strong third-quarter results from the streaming giant. Multiple analysts are also out with positive rating adjustments.

What Happened: Netflix reported third-quarter revenue of $8.54 billion, which beat the consensus estimate of $8.53 billion, according to Benzinga Pro. The company's top-line results were up 7.8% on a year-over-year basis.

Netflix reported quarterly earnings of $3.73 per share, up from $3.10 per share in the same period last year and ahead of the consensus estimate of $3.49 per share.

Netflix said its better-than-expected results were due to higher-than-expected member growth. Paid net adds came in at 8.76 million, up from 2.4 million in the prior quarter, driven by the rollout of paid sharing, strong programming and the ongoing expansion of streaming globally. Netflix ended the quarter with 247.15 million global paid subscribers, up 10.8% year-over-year. 

Netflix also said its ad tier continues to grow, with memberships up almost 70% on a quarter-over-quarter basis. 

"In addition to building engagement by creating movies and series that members will love, we’re also focused on improving monetization through a combination of paid sharing, scaling our ads business and increased sophistication around our pricing and plans," the company said in a letter to shareholders. 

"We’re optimistic about our prospects and the future of entertainment ... we’ve shown that with discipline and a focus on the long term, you can build a strong, sustainable streaming business."

Netflix expects fourth-quarter revenue of $8.692 million versus estimates of $8.77 billion. Fourth-quarter earnings are expected to come in at $2.15 per share, in line with analyst expectations.

Netflix sees full-year 2023 free cash flow of approximately $6.5 billion, up from a previous forecast of at least $5 billion. The company expects operating margins of 20% for the full year versus its prior outlook of 18% to 20%.

Following the print, Keybanc analyst Justin Patterson upgraded Netflix from Sector Weight to Overweight and set a $510 price target. Rosenblatt analyst Barton Crockett maintained Netflix with a Neutral rating and raised the price target from $400 to $404.

Check This Out: Is Netflix A Rare Recession-Proof Stock? Analyst Says Steaming Giant Entering 2024 As 'A Cleaner Story' After Q3 Results

NFLX Price Action: Netflix shares were up 14.3% at $395.50 at the time of writing, according to Benzinga Pro.

Photo: Tumisu from Pixabay.