An analyst advised buying Netflix stock ahead of the report. What's he counting on?

Analyst Seaport Research Partners improved its rating on shares of streaming giant Netflix to "buy" and expects the company's market value to grow by another 19%. Seaport believes that the drivers of growth of the company's securities will be the increasing interest in cheaper tariff with advertising and steady growth in audience engagement. He expects that Netflix revenue from advertising can double this year and reach $ 16 billion by 2030.

Seaport Research Partners analyst David Joyce upgraded Netflix from Neutral to Buy and raised his target price from $1230 to $1385 - 19% above Monday's closing level, Barron's reports. Joyce said Netflix shares, which have been moving without a clear trend lately, could start to rise again amid increased interest in ad-supported fare. "We would recommend buying the stock ahead of its third-quarter report on Oct. 21," the Seaport analyst said.

Netflix is now second only to Disney and Alphabet's YouTube TV in terms of TV viewing share, which will help the platform to increase advertising revenue, Joyce noted. The analyst emphasized that audience engagement on the platform remains high, and a series of bright and significant projects continues to maintain viewing share and attract new subscribers. For example, hits like "The Squid Game" help expand international audiences, allowing the company to spread content costs across a broader base of subscribers and thereby increase margins.

Against this backdrop, Seaport raised its forecasts for Netflix's advertising revenue and operating profit. Joyce estimates that ad revenue could double to $3.1 billion as early as this year and grow to $16 billion by 2030, representing an average annual growth rate of about 48%. He also expects Netflix's operating margin to exceed 32% in 2024 and approach 41% by the end of the decade.

Netflix shares jumped 3.2% to $1201 in Tuesday trading. Since the beginning of 2025, the market value of the company has grown by 33.5%. By comparison, the main U.S. stock index S&P 500 for the same period added 14%.

On Tuesday, analysts at BBA Securities initiated coverage on Netflix stock with an Overweight rating equivalent to a "buy" recommendation and a target price of $1514 - up 30% from the last close. On Oct. 3, analysts at Oppenheimer also reiterated a positive view on Netflix stock, maintaining an Outperform rating ("above market") and a target price of $1425. The bank noted that growth in user engagement remains a key driver of optimism. "Engagement was strong in the third quarter, with viewing hours up 20% year-over-year, and this should grow over the longer term as Netflix more aggressively pursues its live streaming business, strengthening its competitive advantage," the analysts said in a note cited by Investing.com.

In total, according to MarketWatch, investors are advised to buy Netflix securities by 37 analysts out of 54 who have assigned ratings (Buy and Overweight). Another 15 take a neutral stance with a Hold rating and only two recommend selling. Wall Street's average target price of $1373 implies a potential upside of about 18% from the last close on October 6.

This article was AI-translated and verified by a human editor