The overview page of the Netflix Inc. crime documentary miniseries. “Tiger King” is displayed on a laptop.
Gabby Jones | Bloomberg | Getty Images
Shares of Netflix soared to 15% on Wednesday to briefly trade at an all-time high, a day after the company revealed in its fourth-quarter 2020 earnings report that it was considering retrieving shares and had exceeded 200 million first-time subscribers.
It is the biggest jump since the company’s shares closed 19% on October 18, 2016.
“We’ve gone from a historic low on NFLX to a card-carrying bull,” Wells Fargo analysts said Wednesday in a note to clients. The firm also raised its target price to $ 700 per share, from $ 510. At least 15 other companies also raised their price targets.
The video streaming giant said it expects to become a positive cash flow after 2021, which will help analysts claim.
“We continue to be the protagonists of NFLX history, as NFLX offers consumers an increasingly engaging entertainment experience on virtually any device, with no ads at a still relatively low cost,” Pivotal Research Group analysts said Wednesday.
Netflix has benefited from the home stay boom, as the pandemic has left millions of people in need of daily entertainment in the comfort of their own homes. This probably helped boost the number of paid subscribers to over $ 200 million for the first time. It reached 100 million subscribers in 2017.
Netflix’s growth also comes as streaming wars continue to heat up, with competition from Apple TV +, Discovery +, Disney +, H & Max from AT&T’s WarnerMedia and Peacock from CNBC parent company NBCUniversal. ViacomCBS Paramount + will launch in March.
“We continue to believe that the case of competition hampering NFLX’s long-term success is overwhelmed,” Jefferies analysts said Tuesday. “Some competitors will be successful, others will not, but the big picture is that there will be several winners in the OTT broadcast space and hopefully NFLX will stay at the top of the food chain.”
Disclosure: NBCUniversal is the parent company of CNBC.