Netflix' Ad Revenue Set to Double This Year Despite Engagement Concerns, Wedbush Says
Netflix (NFLX) remains on track to roughly double its advertising revenue this year even as US engagement appears to have flattened out, Wedbush Securities said Monday in note. The brokerage reiterated its outperform rating on the stock, with a price target of $118, ahead of the streaming giant's second-quarter results due out on Thursday. Wedbush projects revenue of $12.58 billion, largely in line with consensus estimates, and earnings per share of $0.78, just shy of Wall Street's $0.79 view. "Higher ad load, better targeting after bringing the ad stack in-house, and live-sports pricing power are set to roughly double ad revenue in 2026 toward ($3 billion)," Wedbush analyst Alicia Reese wrote. Netflix's first-quarter results rose year-on-year in April, buoyed by stronger-than-projected membership growth, higher pricing and increased ad revenue. But Wedbush pointed to certain bearish arguments, including US engagement plateauing and a drop in cost per thousand impressions. "Premium CPMs are stepping down as supply grows, but not because advertisers are pulling back," Reese wrote. "The ad business is quietly doing more work than that (headline) CPM decline suggests." The.
Netflix (NFLX) remains on track to roughly double its advertising revenue this year even as US engagement appears to have flattened out, Wedbush Securities said Monday in note.
The brokerage reiterated its outperform rating on the stock, with a price target of $118, ahead of the streaming giant's second-quarter results due out on Thursday.
Wedbush projects revenue of $12.58 billion, largely in line with consensus estimates, and earnings per share of $0.78, just shy of Wall Street's $0.79 view. "Higher ad load, better targeting after bringing the ad stack in-house, and live-sports pricing power are set to roughly double ad revenue in 2026 toward ($3 billion)," Wedbush analyst Alicia Reese wrote.
Netflix's first-quarter results rose year-on-year in April, buoyed by stronger-than-projected membership growth, higher pricing and increased ad revenue.
But Wedbush pointed to certain bearish arguments, including US engagement plateauing and a drop in cost per thousand impressions. "Premium CPMs are stepping down as supply grows, but not because advertisers are pulling back," Reese wrote. "The ad business is quietly doing more work than that (headline) CPM decline suggests." The.