After siding with the bulls in anticipation of Netflix’s latest earnings report, CNBC’s Jim Cramer shared his optimism about the company’s future following the quarter. He was particularly impressed by management’s outlook and commentary on content.
Cramer stated, “If you were concerned about Netflix’s ability to drive growth moving forward, or if there were doubts about the stock’s valuation, I believe those worries have been dispelled by the recent earnings report.” He added, “In the short term, the Netflix bears may quiet down, but it’s important to remember these positive aspects when they eventually emerge and attempt to criticize this top-tier company with a stock that I believe will continue to rise for a long time.”
Netflix exceeded Wall Street’s expectations for earnings, revenue, and paid membership growth in its latest report. The company’s stock surged by 11% on Friday morning and maintained those gains throughout the day.
Cramer found encouragement in management’s guidance for the current quarter and for 2025, with expectations of sustaining double-digit revenue growth that some investors doubted could be sustained. He also praised co-CEO Ted Sarandos’ insights into Netflix’s extensive library and viewer engagement, highlighting that members typically watch two hours of content daily. Sarandos emphasized the company’s focus on enhancing the value of its offerings rather than bundling content with other streaming services, as some competitors are doing.
The diverse content offerings led Cramer to believe in Netflix’s potential to expand its ad-supported tier, citing popular shows like “Emily in Paris,” “Selling Sunset,” and “Squid Game,” along with plans to stream two NFL games on Christmas. He also appreciated Sarandos’ positive outlook on the impact of artificial intelligence on the business.
“I’m not suggesting that Netflix is becoming solely an AI company, but with the growing library, strong customer interest in the ad-supported model, and the utilization of artificial intelligence, we have multiple positives that will likely translate into substantial profits,” Cramer remarked.
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