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- Netflix (NASDAQ:NFLX) was in focus on Wednesday as Wedbush Securities removed the streaming giant from its Best Ideas List amid "high expectations."
- "We are removing NFLX from the [Best Ideas List] but are maintaining our Outperform rating as we continue to see drivers to expand revenue, earnings, and free cash flow at least to the high expectations out there right now," the firm wrote in an investor note. "However, we think it will be much harder for Netflix to impress investors in 2024 vs. 2023."
- Shares rose fractionally in premarket trading.
- It's likely that some of the growth drivers for Netflix, which has seen its shares jump 34% year-to-date and 92% over the past year, are "fully priced in," including the crackdown on password sharing.
- The advertising tier, which was launched in November 2022, still has "significant growth" ahead of it, although it is not yet accretive, Wedbush sad.
- "Once it is, it can expand meaningfully over time and contribute handsomely to earnings growth," the firm said. "We think it will reach accretion this year, and should be the main growth driver in 2025."
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