Are you looking to invest in a company that is poised for significant growth in the coming years? According to JPMorgan, Netflix is set to become a major player in the advertising space, making it a top pick for investors. With the ability to see revenue growth in the mid-teens this year and next, expand margins, and generate free cash-flow growth, Netflix is positioned for success.
Analyst Doug Anmuth predicts that Netflix will experience a boost in scale and monetization by 2025, with the number of ad-tier subscribers expected to reach 31 million by the end of this year and 42 million by the end of next year. He estimates that the company’s advertising revenue will account for at least 10% of total revenue by 2027, signaling significant growth potential.
Despite challenges in building the Ad Tier from scratch and competition from other digital ad platforms, JPMorgan anticipates strong multi-year execution will drive higher monetization for Netflix. With a focus on ad formats, in-house ad tech platforms, and partnerships for programmatic and measurement, Netflix is well-positioned to capture a larger share of the advertising market.
In addition to its advertising efforts, Netflix has also made strategic moves to increase revenue and subscriber count, such as launching an ad-supported plan in November 2022 and cracking down on password sharing. With shares of Netflix rallying more than 41% year-to-date, now may be the perfect time to consider adding this streaming giant to your investment portfolio.
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