Netflix stock price forecast benefits from expanding ad-tier

Netflix stock price forecast benefits from expanding ad-tier segment, projected to contribute $1B in annual revenue by 2025, giving investors a growth catalyst beyond subscription fees. Apple has a median target of $250 per share, implying 3% downside from the current price of $228. The landscape has now changed, as nearly every major media company is promoting its own standalone streaming service. Also, Netflix is more focused on profitability and cash generation that it was in its infancy, meaning prices for consumers have risen substantially over the past several years. Customers now have other choices for streaming subscriptions and the price they pay for Netflix is no longer an afterthought. As the streaming businesses of competitors mature, they may bundle their services together—with or without Netflix—or they may offer their services as add-ons for pay-TV subscribers who receive their linear channels, a foothold Netflix doesn’t currently have. These factors make it possible that Netflix will have a tougher time growing its subscriber base or generating as much revenue per subscriber. Analysts in Netflix stock price forecast warn that competition risk remains, but valuation models still show Netflix trading below its 5-year EV/EBITDA average, creating upside potential.