The Netflix title has made a tremendous comeback in the last six months: a share is now worth $324 again. In June it was just $170. It has increased by around 50 percent in the last two months alone. But the tremendous response surprised me. After all, many experts had predicted a difficult future for the streaming service at the low point. Some even expected another accident.
But now the trend seems to have reversed. Analysts at Deutsche Bank, Bank of America and JP Morgan expect Netflix shares to continue to rise. They will likely have high hopes for the new, ad-funded subscription model. In Germany, the subscription is available for 4.99 euros since the beginning of November. In particular, it is aimed to encourage young people to buy subscriptions. It is not yet known when and at what price it will be released in Switzerland.
Cheap subscription as booster
As Steven Cahall, a bank analyst at Wells Fargo, writes in the German stock market magazine “Der Aktionär,” it reveals the potential with an increase of nearly 23 million subscriptions by 2025. Correcting the estimates upwards will bring Netflix subscriptions to almost 280 million.
The development of paid subscriptions is one of the main drivers of the share price. Netflix, which experienced a decrease in the number of subscriptions in the first half of the year, managed to gain 2.4 new subscribers again in the third quarter. Enthusiasm later spread among investors.
But there are also analysts, like those at Goldman Sachs, who think the stock is overvalued right now. The US bank expects a share price of $200 over the medium term.
Strong competition and danger from cheap subscriptions
On the one hand, this is Amazon Prime, Disney Plus and Co., which is making competition in the market increasingly difficult. due to strong competitors. However, the ad-funded model also risks encouraging existing premium customers to switch to a cheaper subscription. These sales losses could drive out subscription growth again.
However, other analysts continue to believe that the price will continue to rise despite the recent rally. However, there is still a long way to go before it hits the record high last December. At that time, the cost of one share was over $600.