Netflix stock received its third price-target hike in as many days on Wall Street Friday as the video streamer's crackdown on account-sharing is starting to boost its paid subscriber count.
Pivotal Research Group analyst Jeffrey Wlodarczak reiterated his buy rating on Netflix stock and raised his price target to a Street-high 535 from 425. On Wednesday, Netflix stock also scored price-target hikes from investment banks JPMorgan and Wells Fargo.
On the stock market today, Netflix stock climbed 2.6% to 420.02. Year to date, Netflix stock is up 42.4%.
"Netflix represents a unique tech growth story," Wlodarczak said in a note to clients. "It remains well positioned to generate solid subscriber and revenue/free cash flow growth even in a potential global recessionary environment."
Unlike its streaming peers, Netflix is profitable and has demonstrated massive scale economies, Wlodarczak said.
Netflix Looks To Convert Freeloaders
He is bullish on the company's initiative to monetize the roughly 100 million households worldwide that use Netflix but aren't paying for the service because of password sharing. Netflix began its account-sharing crackdown last month in the U.S. and elsewhere after testing its enforcement initiative in four countries.
The Wall Street Journal reported Friday that Netflix has seen a big jump in new subscribers in the U.S. because of the crackdown. The report cited data from streaming analytics firm Antenna.
Netflix ended the first quarter with 232.5 million paid subscribers worldwide.
JPMorgan analyst Doug Anmuth believes Netflix will be able to monetize 14 million of the estimated 100 million account borrowers by the end of 2023. That number will grow to 26 million by the end of 2024 and 33 million by the end of 2025, he said in a note to clients.
Anmuth upped his price target on Netflix stock to 470 from 380 and kept his overweight, or buy, rating.
Advertising Is Another Tailwind For Netflix Stock
The internet television network also recently added a new revenue stream through its advertising-subsidized service level.
Wells Fargo analyst Steven Cahall raised his price target on Netflix stock to 500 from 400 based on prospects for its ad-supported service tier. He rates Netflix stock as overweight.
"We're bullish long term on Netflix's ability to ramp in advertising," Cahall said in a note to clients. But it will take time for Netflix to build scale in the market, he said.
Netflix stock ranks second out of 21 stocks in IBD's Leisure-Movies & Related industry group, according to IBD Stock Checkup. Its industry group ranks No. 30 out of 197 groups that IBD tracks.
Plus, Netflix stock has an IBD Composite Rating of 92 out of 99.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
