What Is Fueling Netflix's Meteoric 297% Rise And The Promise Of 30 Million New Subscribers?

• Netflix's stock increased by 2% on Wednesday, influenced by positive forecasts from industry analysts predicting a 30% rise.
• There is an expected influx of over 30 million new subscribers.
• Netflix’s market penetration stands at 57%, and the stock is up 33 this year.

Netflix Inc's NFLX stock went up 2% on Wednesday, thanks to optimistic forecasts from industry analysts. The streaming giant has seen more market activity recently, driven by positive evaluations from experts like Benjamin Swinburne of Morgan Stanley. Swinburne expects Netflix's stock value to rise by 30% from its current level.

This forecast is based on an expected addition of over 30 million new subscribers by year's end and anticipated double-digit revenue growth next year, reaching mid-teens growth by 2025. The revenue surge is mainly expected to come from Netflix’s expanding advertising ventures. Reports show that Netflix’s ad-supported tier now has 40 million monthly active users, indicating the company’s growing strength in the advertising sector.

The company's growth is also driven by its strategic steps into gaming, live event streaming, and sports broadcasting. It has secured rights to stream two NFL games and entered a major 10-year partnership with WWE. These moves enhance its offerings and could expand its subscriber base.

Adding to the positive outlook, analyst Mark Mahaney recently raised his price target for Netflix from $650 to $700, citing the company’s solid financial standing and strategic positioning within the competitive streaming market.

Engagement metrics further highlights Netflix’s improving market position. A recent survey revealed that 60% of respondents would be more likely to keep their Netflix subscriptions if the service expanded its live content. Additionally, only 35% of users are considering canceling their service in the next three months, a decrease from previous figures.

The company's current market penetration rate is a strong 57%, outperforming major competitors like Amazon and YouTube. This solid penetration is reflected in the stock’s performance, with a notable 17% increase this May, recovering from a 9% decline in April.

Although the stock hasn't yet reached its all-time high from November 2021, it is close, needing only an 8% increase to surpass the $700 mark. This target seems achievable given the stock's historical resilience and recent momentum.

After a steep 76% drop over six months ending in May 2022, Netflix has impressively recovered, rising 297% from its low of $162 to a year-to-date gain of 33%. This trend indicates strong potential for continued growth.

After the closing bell on Thursday, May 30, the stock closed at $647.66, trading down by 0.75%.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.