Netflix Growth Driven by Ads, Pricing Power, and Generative AI, CFRA Analyst Recommends Buying

Netflix is making big moves in the streaming industry, with its expanding advertising business and pricing power catching the attention of CFRA Research. The research firm has upgraded the streaming giant to a buy rating, with analyst Kenneth Leon even raising the 12-month target price to $115, suggesting an upside of 16%.

Leon believes that Netflix’s leadership position in the industry will continue to drive member growth, expand average revenue per user through pricing power, and see advertising contribute to additional revenue growth in the coming year. This could mean an increase of $1.5B to $3.0B in revenue for 2026, which is pretty exciting news for the company.

One interesting point Leon makes is that while subscription growth may be slower, rising advertising revenue is helping to balance things out. Plus, Netflix is looking to expand its reach in developed markets outside of North America and Europe, such as Japan, aiming for mid-teens revenue growth in the U.S. and Canadian markets this year.

It’s also worth mentioning that Netflix is exploring new opportunities to grow its content universe, with ventures like video podcasts, live events, and collaborations with social media creators. Additionally, the company is looking to leverage generative artificial intelligence to enhance storytelling, personalize user experiences, and boost the effectiveness of its advertising business.

Overall, Netflix’s stock has been performing well, up 6% this year and 9% over the past 12 months. With its strategic moves in advertising, pricing, and innovative content development, it’s clear that Netflix is positioning itself for continued success in the competitive streaming market.