Netflix (NASDAQ:NFLX) has been on a tear this year, up roughly 40% thanks to a killer Q1, healthy subscriber adds and the growing appeal of its cheaper, ad-supported tier. Pivotal’s four-star analyst Jeff Wlodarczak clearly likes what he sees: he bumped his price objective from $1,350 to $1,600, which still leaves about 24% upside if Netflix hits that mark.
What’s his logic? First, Netflix’s brand and massive library remain unrivaledthink of them as the crown jewels that keep folks hooked. Second, there’s plenty of room left abroad. Even though Netflix is already in nearly every country, emerging markets haven’t been fully tapped yet. Wlodarczak expects big subscriber gains there over the long haul.
He also pointed out how the ad-tier adds a value play: it brings in price-sensitive viewers and lifts average revenue per user without breaking the bank. And yes, there’s that eyebrow-raising $1 trillion market-cap goal for 2030. It sounds ambitious, but Pivotal argues that consistent execution and global expansion could get Netflix there.
This article first appeared on GuruFocus.