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Shares of Netflix (Nasdaq: NFLX) are up around 10% ahead of the market open on Wednesday, driven by significantly positive sentiment from the landmark WWE deal, strong Q4 report, and a series of upgrades by Wall Street analysts.

Netflix’s WWE Deal and Record Number of Paid Subscribers Last Quarter

On Tuesday, Netflix attracted notable investor attention after the streaming giant announced it had inked a $5 billion live-streaming deal with WWE, the world’s most popular professional wrestling show. The deal, set to take effect in January 2025, will see Netflix stream WWE’s flagship Raw program over the next ten years.

The positive sentiment around the deal expanded later when Netflix reported better-than-expected revenue and subscriber growth for Q4.

The company added 13.1 million new subscribers during the three months, topping the 8.76 million it added in Q3 and above Wall Street’s expectations of 8 to 9 million. Netflix now has 260.8 million paid subscribers, marking a new record high for the streaming behemoth and beating the estimated 256 million.

Netflix reported Q4 earnings per share of $2.11, below the consensus projection of $2.22. Revenue stood at $8.83 billion, while analysts were looking for $8.72 billion.

As part of its efforts to enhance profitability, Netflix has raised its 2024 full-year operating margin projection to 24%, surpassing the earlier range of 22% to 23%. This adjustment is attributed to the depreciation of the US dollar and a better-than-anticipated performance in the fourth quarter.

Further, the company forecasts an earnings per share of $4.49 for the first quarter of the fiscal year 2024, surpassing Wall Street’s expectation of $4.10.

Following the report, Netflix saw several upward revisions in price targets from Wall Street analysts. Evercore raised their 12-month price target on the stock from $500 to $600, KeyBanc increased theirs from $545 to $580, and Morgan Stanley adjusted theirs from $550 to $600 per share. Pivotal Research stood out as particularly bullish on NFLX, raising their target price to $700 from $600.

NFLX Could Hit Fresh 52-Week High Today

Netflix’s shares have been on an overall uptrend over the past year and a half, marking a notable comeback from April 2022 lows, when the streaming giant recorded its first net subscriber loss in over a decade.

The stock fell as low as $185, meaning it has rebounded by an impressive 165% since then. NFLX closed at $492.19 on Tuesday, edging closer to its 52-week highs. With a strong surge in premarket trading of nearly 10%, NFLX looks set to hit a new yearly record on Wednesday.

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