Shares of Netflix (NFLX +3.99%) soared to a record high after its first-quarter earnings report exceeded Wall Street expectations. For the period ending March 31, the streaming giant posted a 13% year-over-year revenue increase. Its earnings per share (EPS) reached an all-time high of $6.61, up 25% from the prior-year quarter.
With the stock price up 71% over the past year as of this writing, some investors might assume it's too late to buy Netflix. However, this thinking risks overlooking the big picture, as the company's outlook is bolstered by several fundamental tailwinds.
Here's why there's still time to buy shares of Netflix.
NASDAQ: NFLX
Key Data Points
Several reasons to stay bullish on Netflix
By all accounts, Netflix is running at max volume.
Management cites ongoing growth in new memberships, with gradual subscription price increases worldwide supporting higher margins and earnings. It is also optimistic that an industry-leading slate of exclusive series and movies is keeping viewers engaged. Notably, Netflix has seen a favorable response to its push into live events, including boxing matches and weekly WWE pro wrestling.
Image source: Getty Images.
Perhaps the biggest development has been Netflix's success in scaling its advertising-supported tier, which is attracting a broader mix of subscribers while opening new revenue streams.
Netflix co-CEO Gregory Peters highlighted that the company is "just beginning" to leverage its proprietary adtech in the estimated $600 billion global advertising market. While still a relatively small part of the business relative to subscriptions, adtech is now an important growth driver.
The rally in Netflix stock can keep going
For 2025, Netflix is targeting revenue between $43.5 billion and $44.5 billion, representing a solid 13% increase at the midpoint forecast compared to 2024. Its forecast for an operating margin of 29% would mark a company record and is well above the 26.7% result last year. This dynamic underscores a key development -- Netflix is now more profitable than ever, and that could power the next stage of the stock price rally. Netflix stock remains a great option for investors to buy and hold in a diversified portfolio.
