Netflix, the streaming giant known for its captivating content, has recently reported an impressive year-over-year revenue growth of 17.2% for the third quarter of 2025. This momentum comes at a time when the market is abuzz with news of the company’s 10-for-1 stock split, aimed at making shares more accessible to small investors. Currently, Netflix’s share price is hovering above $1,100, reflecting a bullish trend that has raised questions about its valuation and attractiveness for potential investors.
Top investor Daniel Sparks, recognized as a 5-star analyst within the top 1% of stock professionals, suggests now is an opportune moment to analyze Netflix in more depth. He highlights the company’s remarkable momentum, which he attributes to an effective combination of price increases, a growing membership base, and an expanding advertising revenue segment. Sparks points out that this emerging advertising model is scaling rapidly and holds the potential to significantly contribute to Netflix’s overall growth without solely relying on new subscribers or further price hikes.
Sparks remarks on the improving operating margins at Netflix, expected to rise from 27% in 2024 to 29% this year. Evaluating the current valuation, he finds Netflix’s Forward Price-to-Earnings ratio of 35x reasonable and even attractive, particularly in light of the company’s leading position in the market.
Sparks expresses a positive outlook, stating, “So, is Netflix stock a buy – even after a stock split? I think so.” However, he advises investors to remain cautious due to the fierce competition prevalent in the streaming landscape.
Wall Street appears to be in agreement with Sparks, as Netflix garnered 26 Buy ratings, 7 Holds, and just 1 Sell, resulting in a Moderate Buy consensus. Analysts project a 12-month average price target of $1,398.59 for NFLX, indicating potential growth of over 25%.
As Netflix continues to innovate and adapt in the dynamic streaming market, investors seem optimistic about its prospects, particularly in harnessing advertising revenue to enhance profitability without solely depending on subscriber growth. This strategic approach could pave the way for a robust future for the company, signaling a positive outlook for investors willing to engage with this evolving opportunity.