5. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders as of Q4: 144
Arrowstreet Capital’s Equity Stake: $2.05 Billion
Netflix, Inc. (NASDAQ:NFLX) is a leading global streaming service that provides a diverse array of movies, TV shows, and original productions to millions of subscribers worldwide. The company achieved record highs after delivering a strong fourth-quarter earnings report, surpassing expectations for subscriber growth, revenue, and profitability. In Q4 2024, Netflix reported earnings of $4.27 per share, marking a 102% increase from the previous year, while revenue climbed 16% to reach $10.25 billion. The platform gained 18.91 million new subscribers during the quarter, exceeding Wall Street estimates and bringing its total subscriber count to 301.63 million. For 2025, Netflix projects a 13% revenue increase, reaching $44 billion.
Immediately following the outstanding Q4 results, Netflix, Inc. (NASDAQ:NFLX)’s stock surged 18%, as analysts voiced confidence in the company’s 2025 growth potential, upcoming content slate, and continued dominance in the streaming industry. The company expects revenue growth to be driven by increased user engagement, organic subscriber expansion, and higher average revenue per user due to recent price adjustments.
However, Netflix, Inc. (NASDAQ:NFLX) shares experienced a sharp decline on March 7, falling 4.5% after an 8% drop the previous day, reducing the company’s market capitalization by approximately $40 billion to $375 billion. The downturn followed a report from MoffettNathanson analyst Robert Fishman, who warned that while Netflix may continue to see subscriber growth in the near term due to its content lineup and ad-supported tier, the impact of its password-sharing crackdown is expected to diminish. Despite this decline, the stock remains up 46% since March 2024 and has risen 1% year-to-date, even after an 11% drop in the past 30 days. The company saw a surge in shares following its January earnings report, which revealed nearly 19 million new subscribers in Q4 2024. In response to these strong results, Guggenheim Partners’ Michael Morris raised Netflix, Inc. (NASDAQ:NFLX)’s 12-month price target from $950 to $1,100, citing the anticipated return of hit series like Stranger Things and Squid Game in 2025, as well as the continued growth of Netflix’s ad-supported business.
RiverPark Large Growth Fund stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its Q4 2024 investor letter:
“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top contributor in the fourth quarter powered by a 3Q earnings report that included stronger-than-expected revenue and operating income, solid subscriber additions, and positive forward commentary. Anti-password sharing and ad tier initiatives continue to drive subscriber growth while improving revenue per user trends, from recent price increases, drive margin expansion. The company was optimistic about future revenue growth, margin expansion, free cash flow generation and future return of capital programs.
The recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving the operating margin to more than 25%. We also believe that the stabilization of content spend should allow the company to continue to scale its free cash flow.”
