On Monday, CNBC’s Jim Cramer outlined his reasons for maintaining an optimistic outlook on Netflix, analyzing both the optimistic and pessimistic perspectives regarding the streaming company by considering two recent analyst notes.
Cramer indicated that unless there is news of individuals canceling their Netflix subscriptions due to price increases, significant issues within the advertising sector, or uncontrollable expenses in video games or live events—none of which have occurred—he believes Netflix merits confidence. Therefore, he continues to support a positive investment stance, expressing skepticism about the speculative nature of the negative arguments.
He compared analyst reports from Barclays, which downgraded Netflix, and Piper Sandler, which upgraded the company’s stock. Cramer emphasized that such “analyst face-offs” can provide investors with comprehensive information, helping them form their own judgments.
Barclays’ team suggested that Netflix could struggle to achieve its earnings objectives, pointing out that its growth strategy might involve tradeoffs. They also noted that achieving the revenue targets may be challenging, as the current valuation assumes that the subscriber base will double, which they consider “unrealistic.”
In contrast, Piper Sandler predicted that the company’s profit margins might exceed current expectations in 2025 and 2026, describing Netflix as a leading force in streaming. They expressed confidence in the company’s ability to expand its subscriber numbers and leverage its pricing power, expressing optimism about the future potential of Netflix’s advertising efforts.
Cramer disagreed with Barclays’ view that Netflix may not fulfill revenue expectations, noting the company’s consistent outperformance in previous quarters. With Netflix planning to cease reporting subscriber growth next year, Cramer suggested that the company’s focus will shift entirely to increasing revenue, which he considers its “new key metric.”
According to Cramer, Netflix’s expanding advertising business and additional revenue from paid sharing plans give it greater flexibility in achieving its revenue goals.
Netflix did not immediately provide a comment on the matter.
