Netflix (NFLX -2.25%) stock has been flirting with a big milestone heading into 2024. The company's price approached $500 per share in the final weeks of 2023 to mark a huge rebound from the post-pandemic low of $175 set in mid-2022.

The stock isn't near the all-time high of $690 set back when digital entertainment demand was soaring in 2021. But Wall Street is clearly optimistic about Netflix's return to strong subscriber growth and its quickly improving finances.

With those positive factors in mind, let's look at whether $500 might be a pit stop on the way to bigger milestones for Netflix investors in 2024 and beyond.

The latest trends

There were a few factors behind Netflix's stock price rally this past year, but the clearest positive trend has been its rebounding growth rate. Revenue expanded by less than 5% for three consecutive quarters through mid-2023, yet is now on the upswing.

Sales were up 8% last quarter and are expected to grow by about 11% in the fourth quarter. This boost isn't just coming from rising prices, but also through accelerating subscriber growth. That metric crossed back into the double digits last quarter for the first time since early 2021.

The surest sign that Netflix can maintain this positive momentum is solid engagement. More streaming hours mean members are likely to continue their subscriptions and recommend the service to friends. That's how Netflix can keep standing out against streaming rivals like Roku and Disney+.

Improving finances

There's less ambiguity around Netflix's strengthening finances. Management hiked its earnings, cash flow, and profitability targets in October after growth sailed past expectations in the third quarter. Keep an eye on operating profit margin, which is set to cross 20% of sales this year.

The stock has room to continue rising along with further profitability gains. Roku isn't close to positive territory on this metric, in contrast. Netflix also has Disney beat, roughly doubling the entertainment giant's 10% profit margin.

NFLX Operating Margin (TTM) Chart

NFLX operating margin (TTM) data by YCharts; TTM = trailing 12 months.

What's next for Netflix shares?

Netflix shareholders might be disappointed in 2024 if sales growth slows back down. There are many competitive options for TV fans, and Netflix doesn't have the huge content lead that it used to have against these rivals.

Yet it seems likely that the company will extend its positive momentum into 2024. Its new ad-supported service, plus several rounds of price increases from peers, have made it more price-competitive and highlight just how important scale is for this business. Few rivals can match Netflix in this area, meaning it could win the majority of the industry's earnings.

It will announce fourth-quarter results on Jan. 23, and most investors are looking for sales to grow about 11% due to strong subscriber gains. In addition to this boost, watch cash flow and profitability trends.

Netflix has a good chance to push both metrics into record territory in 2024 and beyond. In that scenario, the stock could easily cross $500 per share this year and move closer to setting fresh all-time highs. Investors should stay tuned to this stock.