Investing.com -- Netflix's push to roll out stricter password sharing rules, introduce advertising and optimize subscriber plans will help drive revenue growth at the streaming giant this year, according to analysts at Oppenheimer.
In a note to clients on Sunday, the analysts said that, despite increased competition, Netflix (NASDAQ:NFLX) remains the dominant streaming platform and controls a large market share of U.S. television viewership.
"We believe [Netflix]’s dominance will continue, given its clear advantage in producing high-engagement content and monetizing that content more effectively than peers," the Oppenheimer analysts added. They raised their price target for the company to $725 from $615.
The analysts estimated that average revenue per membership will grow by 4% year-on-year in 2024, thanks largely to price increases for Netflix's basic and premium packages in the U.S., U.K., and France in October. Revenue rose to $8.8 in the fourth quarter.
Net subscriber additions are also seen beating Wall Street estimates by 31% over the next three years.
Netflix added a 13.1 million subscribers in the fourth quarter -- its biggest-ever tally for the three-month period -- due in part to demand for original titles like "The Crown" and reality show "Squid Game: The Challenge" as well as licensed programming such as "Young Sheldon" and "Suits."
The returns have come as Netflix has largely focused on enhancing profitability following a steep post-pandemic dip in operating margins. Executives have said they will continue to expand Netflix's ad-sponsored subscription offering, improve an ongoing crackdown on password sharing between users, and raise prices again this year.
However, the Oppenheimer analysts flagged that the business still faces a number of risks, including higher-than-anticipated content costs and an "inability" to execute on its advertising platform.