Netflix's Resilient Revenue Outlook Buoys Investor Confidence

Netflix shares rose in premarket trading as its positive revenue forecast reassured investors amid economic challenges. Co-CEO Greg Peters highlighted the company's resilience and analysts noted strong potential in its advertising business. Despite global economic concerns, Netflix remains poised for continued growth and investor optimism.

On Monday, Netflix shares climbed by approximately 3% in premarket trading, driven by the company's optimistic annual revenue forecast, which provided reassurance to investors amidst economic uncertainty shaped by prevailing tariffs.

Co-CEO Greg Peters emphasized the resilience of Netflix, noting that the streaming service has historically weathered economic downturns without significant changes in customer behavior, as evidenced by first-quarter earnings surpassing analysts' expectations.

Netflix reaffirmed its 2025 revenue projection between $43.5 and $44.5 billion, alleviating investor apprehensions about potential repercussions from President Trump's tariff strategies on consumer spending in the streaming sector.

Analyst Jeffrey Wlodarczak from Pivotal Research Group highlighted Netflix's resilience even in potential global recessions, citing the compelling price-to-value ratio of the service. He predicted growth in Netflix's nascent advertising business.

Netflix's ad-supported, lower-priced tier accounted for 55% of new sign-ups, with BofA Global Research analysts expressing optimism about long-term growth in advertising driven by investments in ad-tech capabilities.

The Wall Street Journal reported Netflix's ambition to double revenue from $39 billion in 2024 and generate about $9 billion in global ad sales by 2030. The cessation of subscriber data reporting has led Netflix to focus on maintaining steady revenue growth to provide Wall Street with a reliable health metric.

In contrast, Walt Disney and Warner Bros Discovery shares fell slightly in premarket trading. At least seven brokerages raised Netflix's price target post-results, with the median target reaching $1,147.50, according to LSEG data.

(With inputs from agencies.)