Wedbush revealed it has removed Netflix (NASDAQ:NFLX) from its Best Ideas List in a note Wednesday, citing the company's "year of significant growth."
Despite the removal, the firm maintained its Outperform rating on the stock as it continues to see drivers to expand revenue, earnings, and free cash flow, at least to the high expectations out there right now.
However, analysts said it will be much harder for Netflix to impress investors in 2024 vs. 2023, with some of the growth drivers priced in.
In a separate note raising its price target for the stock to $725 from $615, Wedbush stated that its "quarterly survey indicates a seasonal deceleration in subscribers (though likely continued YoY growth) and an expansion of subscribers on Netflix's ad tier."
Nevertheless, analysts believe Netflix's ad tier will continue to limit churn, and state it has a significant opportunity to expand its advertising revenue in 2024 and beyond.
"We think Netflix has reached the right formula with global content creation, balancing costs, and increasing profitability. We think Netflix will continue to expand profitability and generate increasing free cash flow," concluded Wedbush.