Can Netflix Be a $1 Trillion Company by 2030?

Core Viewpoint - Netflix aims to achieve a $1 trillion valuation by 2030, requiring the company to more than double its current market capitalization of$466 billion, indicating significant upside potential from its current stock price [1][2]. Revenue Growth Potential - To reach the target revenue of $78 billion by 2030, Netflix needs to achieve a compound annual growth rate (CAGR) of 12.2%, with Q1 revenue growth recorded at 12.5% [3][5]. - Management has provided optimistic guidance for Q2 2025, expecting revenue growth of 15.4%, which is above the necessary threshold for doubling revenue by 2030 [5]. Market Focus - Key growth markets for Netflix include EMEA (Europe, Middle East, and Africa) and APAC (Asia-Pacific), with revenue growth in these regions reported at 15% and 23% year-over-year, respectively [6]. - The U.S. and Canada market growth is slower at 9%, emphasizing the need for Netflix to focus on international markets to achieve its valuation goal [6]. Advertising Strategy - Netflix has launched an advertising platform in the EMEA market, which is expected to enhance revenue by providing targeted ads, and plans to introduce this feature in the APAC region in Q2 [7][8]. - The advertising tier allows Netflix to reach households with lower disposable income, contributing to its growth strategy [9]. Economic Resilience - Netflix is considered recession-proof due to its affordability as a form of entertainment, providing access to a vast library of content for a monthly fee lower than dining out [10]. Stock Valuation Concerns - Despite achieving a new all-time high, Netflix's stock is viewed as expensive, trading at 43 times forward earnings, with high growth expectations already priced in [11][13]. - A more reasonable forward earnings valuation for Netflix would be in the low-to-mid-20s, suggesting that the current valuation may not be sustainable without significant revenue growth [14].