Netflix Stock Gains 5% As Atlantic Expands Advertising

Netflix stock NASDAQ:NFLX

Netflix stock rises $4238.31 as of 11:12 AM EDT on Wednesday.

Netflix stock increases by 5% as Atlantic upgrades the advertising opportunity As Atlantic Equities is the most recent upgrader based on optimism from the streamer’s future ad-supported service, Netflix stock (NASDAQ:NFLX) is the leading major Communications stock gainer, up 5.3%.

The company raised its assessment from Neutral to Overweight. According to analyst Hamilton Faber, “we believe that sell-side projections now incorporate little in the way of advertising benefits, however, given the rise of the company, we believe the buy side is ahead.

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Netflix Stock Forecast

In fact, according to Faber, Netflix may bring in an average of $26 per user per month in revenue from advertising, more than tripling what Disney currently receives from the venerable ad-supported service Hulu (NYSE:DIS). Some customers may choose to cancel their current ad-free plans, but that would still increase the ARPU as a whole, he said.

In terms of the total effect, Faber estimated that incremental ad revenue might increase by $6.7 billion in three years or 7% annually. The company’s price target has increased from $211 to $283, representing a 20% increase. With plans for its first internal game studio, Netflix (NFLX) is also stepping up its gaming efforts.

Netflix Will Open a Games Studio in Helsinki, Finland.

This is Netflix’s fourth video game studio, but it’s the first time it’s been established from scratch rather than acquired. “This is another step towards our aim to develop a world-class games studio that will produce delightful and profoundly engaging original games – with no adverts and no in-app purchases,” the business added.

Marko Lastikka will lead Netflix’s studio. Lastikka has worked as a VP and general manager at Electronic Arts and Zynga for 19 years. Co-founded Zynga’s Helsinki studio, which made FarmVille 3. Former Zynga CCO Mike Verdu became Netflix’s VP of game development last year.

Netflix is pushing into video games as its subscriber growth slows and people tire of streaming video after binge during the flu. In July, the business stated it will offer free games to subscription programs.

Featured Image-  Megapixl @ Ugurbekir

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