Netflix is trading near its fresh all-time high. One of my favourite stocks already climbed by over 40% for the last three months starting at the bottom of early August's retracement at $587 to the current prices above $822 on today's pre-market. And so, I'm really happy for my perfect prediction of some minimal price target at $800. However, right now I am turning to a take profit mode. Particularly, I began to use an automatic trailing stop order, with my tolerance ending outside a 2% range of fluctuations. Thus, the least attempt of even an intraday drop in Netflix market value will lead to a cash out, as I see higher risks associated with excessive amplitude of market movements over the past few days when price change was happening too quickly and the stock added more than $70 after a promptly start from around $750 on the U.S. election night. Yet, no distinct corporate drivers are standing behind the last wave of Netflix shining, except high hopes of even faster business improvement.
Bloomberg news saying that Netflix reached 70 million users watching its content with a cheaper ad-supported tier for subscription was the last point. Normally, the cheapest subscription plan, without commercials, costs $15.49 a month. And the add-supported plan is discounted to become priced at $6.99 per month in the U.S. This is actually good news, of course, that the add-heavy tier accounts for more than half of all new Netflix sign-ups where this subscription plan is available. It counted 40 million global monthly active users only in May, and now it is close to doubling the number. The fact actually means that Netflix raised its major prices (on its add-free options) in order to inspire more customers to choose the tier with commercials to eventually get more revenue per user because of growing advertising income. As the latest example, Netflix signed FanDuel as an exclusive pre-game sports betting partner for its Christmas Day National Football League (NFL) games. It's a useful and fair trick to further improve financial performance of Netflix business but its CEOS commented this would not become a primary driver of growth until 2026 at least. However, I am not sure that great marketing ploys like this could be mirrored by as much as 40% of price jumps in a short period.
The average analyst sentiment on Netflix is bullish but a 12-month price target by Wall Street expert pool is now around $760, which is a more than 7% downside from today's higher market value, with the range of big funds' predictions lies from $550 to $925. I am surely more inclined to higher expectations in the longer run, but frankly speaking, I am not an NFL fan at all, and also I love money much more than being attached to my own forecasts, especially when my previous projections can be considered as completely fulfilled.
