Netflix stock advanced Friday following a report that showed higher subscriber engagement with the streaming video service's content.
KeyBanc Capital Markets analyst Justin Patterson said his firm's latest media survey showed increasing usage of the Netflix service by its members.
"We believe this corresponds to improved content and less competitive pressure," Patterson said in a client note Wednesday.
Patterson reiterated his overweight, or buy, rating on Netflix stock and upped his price target to 707 from 705.
On the stock market today, Netflix stock climbed 2.5% to close at 669.38. Earlier in the session, it rose as high as 675.58.
Netflix Stock In Buy Zone
On May 20, Netflix stock broke out of a cup base at a buy point of 639, according to IBD MarketSurge charts. The 5% buy zone extended to 670.95, based on IBD trading principles.
"Data reinforce that Netflix's member trends and engagement are improving," Patterson said.
Also, debit- and credit-card data point to more subscriber gains, he said. "We believe this shows Netflix is reaching both new and lapsed members," he said.
Netflix ended the first quarter with 269.6 million total subscribers worldwide.
"With original content improving and some opportunistic live events (NFL Christmas Day games, Chestnut vs. Kobayashi, etc.), we believe there is opportunity to raise price," Patterson said.
Netflix previewed its holiday pro football games in May at its Upfront presentation for advertisers. On Wednesday, the service announced that it will hold a hot-dog-eating competition between champions Joey Chestnut and Takeru Kobayashi in a live Netflix special on Sept. 2.
Popular content recently on Netflix has included original movies "Atlas," "Hit Man" and "Under Paris" and TV series "Bridgerton" and "Eric."
Netflix stock is on three IBD lists: IBD 50, Big Cap 20 and SwingTrader.
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