On Thursday, Netflix reported an addition of 5.1 million new streaming subscribers in the third quarter, with its ad-supported service contributing to more than 50% of new sign-ups in regions where it is offered.
“Netflix is an essential service for many, and its recent performance underscores its enduring popularity,” stated Dan Coatsworth, an investment analyst at AJ Bell.
The streaming service anticipates that customer additions for the December quarter, typically a robust period due to the holiday season, will surpass those of the September quarter. The highly anticipated second season of the Korean drama "Squid Game" is set to premiere in late December.
Shares of Walt Disney and Warner Bros Discovery saw slight increases as well.
"Traditional media competitors are facing significant financial losses, allowing Netflix to capitalize on content creation while others struggle to invest further," remarked Matt Britzman, senior equity analyst at Hargreaves Lansdown.
The introduction of advertisements is also planned for 2025, and recent price increases in certain markets could potentially enhance revenue from existing subscribers, he added.
Following the results, at least eight analysts raised their price targets for Netflix stock, adjusting the median target to $750 from $706.38, according to LSEG data.
However, while the new subscriber growth exceeded expectations, it fell short of the 8.76 million subscribers gained in the same quarter last year.
The company has been focusing on shifting investor attention from subscriber numbers to other metrics such as revenue growth and profit margins as the rate of subscriber growth stabilizes.
Year-to-date, Netflix's stock has appreciated approximately 41.2%, while Disney's shares have increased by 6.9%, and Warner Bros has seen a decline of about 31%.