Paramount (PARA 1.20%) stock is making big gains Friday. The media company's share price was up 14.2% as of 1:30 p.m. ET, according to data from S&P Global Market Intelligence.

Paramount published third-quarter results after the market closed yesterday, posting sales and earnings performance that came in ahead of the market's targets. Not only did the company deliver top- and bottom-line beats, it also issued forward guidance that's prompting an uptick in bullish sentiment.

Paramount's Q3 earnings crushed forecasts

Paramount recorded non-GAAP (adjusted) earnings per share of $0.30 on revenue of $7.13 billion in Q3. Meanwhile, the average analyst estimate had called for per-share earnings of $0.10 on sales of $7.12 billion. While revenue came in slightly above expectations in the period, earnings absolutely crushed Wall Street's target, and it looks like the beat might not be a one-off event.

What was behind the big earnings beat? One of the biggest drivers was a more conservative approach to spending on the Paramount+ streaming platform.

According to Paramount CEO Bob Bakish, the company's investment in building out content and tech infrastructure for its streaming platform has peaked. With the company now cutting back on spending to bolster content and adoption for the platform, the company's bottom line should be under less pressure.

And even with some moderation in streaming spending, Paramount+ added 2.7 million net subscriptions to push its total subscriber count above 63 million last quarter. Revenue for the service was up 61% year over year thanks to subscription and advertising-sales increases.

What comes next for Paramount stock?

Even after today's big pop, Paramount stock is still down roughly 19.5% across this year's trading. The company is now valued at approximately 36.6 times this year's expected earnings and less than 30% of expected sales.

PARA PE Ratio (Forward) Chart

PARA PE Ratio (Forward) data by YCharts.

While Paramount cutting back on streaming spending opens the door for stronger earnings performance going forward, it remains to be seen if the company can establish itself as a long-term player in the category. The media specialist owns some valuable entertainment properties and could be a potential buyout target for a larger player in the space, but a potential acquisition suitor would also have to be willing to take on Paramount's sizable debt load.