Netflix Expects Double-Digit Revenue Growth in 2025, According to Its CEO. Time to Buy the Stock?

Core Viewpoint - Netflix has demonstrated a remarkable turnaround in growth and profitability, with significant increases in revenue and subscriber count, leading to all-time high stock prices [1][3][4]. Financial Performance - In Q3 2024, Netflix reported a 15% year-over-year revenue increase, nearly double the growth rate from the same quarter in 2023 [1]. - The company achieved an operating margin of 30% in Q3 2024, up from 22% in the prior-year period, indicating improved profitability [4]. - Free cash flow per share reached an all-time high, showcasing the company's financial strength [4][5]. Subscriber Growth - Since hitting a low in 2022, Netflix has gained over 60 million net subscribers, bringing the total to nearly 283 million worldwide [2]. - The company implemented measures such as restricting password sharing and introducing a lower-priced ad-supported subscription tier to stimulate subscriber growth [2]. Future Outlook - Management projects a continued revenue growth rate of 15% for Q4 2024 and between 11% and 13% for fiscal 2025 [3][4]. - Netflix's advertising platform, still in its early stages, is expected to enhance revenue growth beyond 2025 as monetization rates improve [6]. Valuation - Despite a rising price-to-sales (P/S) ratio nearing 9, the company's growth potential supports its valuation [5]. - The stock's current high price does not diminish the impressive profitability and future growth prospects driven by advertising [6].