Netflix stock rises as bulls cheer streamer's password crackdown

Netflix shares rise as investors cheer the company's crackdown on password sharing. Yahoo Finance Live breaks down the latest data from Antenna on the streamer.

Video transcript

RACHELLE AKUFFO: The fresh enthusiasm today coming from a Pivotal research group analyst who upped his price target on Netflix shares to $535 from 425 Friday. Cheering the password sharing clampdown, among other drivers. Now, his $535 target is the highest on the street. So definitely worth keeping that in mind. Brad.

BRAD SMITH: Yeah. Let's add on to this a little bit more too--

JULIE HYMAN: Yeah, there's--

BRAD SMITH: --because we got the Pivotal note this morning.

JULIE HYMAN: The Pivotal note, but there's also new data out from this company called Antenna that monitors subscriber growth here. And since subscribers found out that Netflix was going to start cracking down on password sharing, according to Antenna, Netflix has had the four single largest days of US user acquisition in the 4 and 1/2 years that Antenna has been tracking this.


JULIE HYMAN: So really interesting. So what Antenna is now saying is that Netflix saw almost 100,000 sign ups per day on May 26th and May 27th. So this really gives credence to what analysts like the folks at Pivotal have been saying that this is going to be a boom to Netflix. And we've seen Netflix shares bounce on all of this.

BRAD SMITH: Yeah. Pivotal upping their target to a street high of $535 per share and saying in the bottom line, they raised it because to a lesser extent, the effects of increases in their free cash flow expectations in 2023 and beyond. But ultimately, saying that Netflix represents a unique tech growth story given it remains well positioned to generate solid subscriber and revenue/free cash flow growth even in a potential global recessionary environment via their better monetization of the approximately 100 million plus households that currently utilize Netflix outside of paying households via password sharing.

JULIE HYMAN: You know, there's one more thing that they said in that Pivotal note that stood out to me, Brad. Although, I guess it's a reiteration of something they've already said, which is that Microsoft eventually is going to step in and buy Netflix. That's what the Pivotal analyst said. They said recall our view that after a strong year in 2023 and 2024, management may look to sell the company in 2025 with Microsoft being the most logical acquirer in our view.

BRAD SMITH: Yeah. Well, potentially. We will see.