Subscribers and consumer advocates may be frowning on Netflix‘s latest price hikes, but Wall Street is celebrating the move.
The streaming giant’s stock price doesn’t yet reflect it, analysts’ uniformly positive reaction is perhaps the biggest vote of confidence by the Street since Netflix withdrew its proposal to acquire Warner Bros. last month. In early trading Friday, shares were up a fraction to around $93.50 on below-average trading volume.
Bernstein’s Laurent Yoon, who maintains an “outperform” rating on Netflix shares, called the hikes announced Thursday “good news” and “a welcome relief for investors.” The second round of increases since January 2025 affected all plans (a $1 boost for Standard with Ads, and $2 apiece for the ad-free Standard and Premium tiers).
The increases are “consistent with historical cadence,” Yoon wrote in a note to clients, adding that the move guarantees double-digit revenue growth in 2026, possibly above the company’s guidance of 12% to 13%.
Matthew Dolgin, a senior equity analyst for Morningstar, said he “didn’t expect the next round of increases to come before the fall.” The Netflix management team, he noted, factored price hikes into its 2026 revenue outlook, but “we suspect the subsequent disintegration of its Warner Bros. acquisition altered the timing.” That could mean the company will be raising its forecast when it reports first-quarter earnings next month.
MoffettNathanson’s Robert Fishman said Netflix has shown a remarkable ability to keep subscriber churn very low despite regularly increases prices. In a client note, Fishman said the introduction of an ad tier in 2022 has provided a strategic boost to the company.
“Netflix now has greater ability to take price on the top end while recapturing users looking to reduce their monthly bill in an industry-low priced ad-supported offering,” Fishman wrote. “This reduces net churn for the overall platform, while driving incremental revenues via advertising as the company looks to aggressively scale this secondary revenue stream (with a target of doubling global ad revenue this year).”
The decision to be aggressive and raise prices now does entail some risks, however. Dolgin says if more people trade down to the ad tier (something Netflix execs have said is not yet happening), that could bring other headaches. “A larger ad-supported base bolsters advertising sales opportunities,” he wrote, “but those must also make up the $11 per subscriber per month headwind versus ad free.”
Fishman is far more sanguine. The decision to raise prices more aggressively on the pricier ad-free tiers than on the cheapest ad-supported one “continues to underscore Netflix’s pricing strategy.” Fishman wrote. The strategy, he continued, entails “maintaining a wide gap between its highest and lowest tiers to simultaneously maximize monetization of its least price-sensitive subscribers while nudging more price-sensitive customers toward its still-nascent ad tier, driving engagement and, in turn, advertising revenue.”
The result, Fishman added, is a “‘best of both worlds’ approach that captures value across the full spectrum of its subscriber base and should drive even higher margins for the leading profitable streaming service.”