Netflix Could Jump 139% in 5 Years, According to Management

Jeremy Bowman, The Motley Fool

Sat, Apr 19, 2025, 3:08 PM 5 min read

Netflix (NASDAQ: NFLX) is one of the best-performing stocks of the 21st century, and it's been one of the biggest surprises over the last three years.

The streaming giant was left for dead in 2022 after it reported two straight quarters of declining subscriber growth in the aftermath of the pandemic. Since then, the company has cracked down on password sharing, launched an advertising tier, and begun embracing live sports, a genre it traditionally avoided.

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As a result, the company has returned to strong growth on the top and bottom lines, and the stock has soared over the last three years, reaching a market cap of more than $400 billion. Now, management thinks it has a path to getting to a trillion-dollar valuation by 2030, according to a report from The Wall Street Journal. Doing so would mean the stock would jump 139% over the next five years, assuming that its share count holds flat.

Can Netflix get there? Let's take a look at its prospects.

Netflix has put a lot of daylight between itself and the rest of the industry, especially as legacy media companies like Disney have struggled in streaming thus far.

The company added more than 40 million subscribers last year to bring its total to more than 300 million. Management has set a target of 410 million by the end of 2030, meaning it would grow at a compound annual growth rate of about 5% over six years, or add 18 million subscribers a year. That goal seems very achievable for Netflix, which has historically grown its subscriber base by about 25 million to 30 million a year.

The service has become more mature in key markets like North America, where it has 90 million subscribers, or close to 75% of all broadband households. So some slowdown is expected.

The company has attracted new advertisers by lowering its ad rates. It said that 43% of subscribers joined through the ad tier in February. That's key, because the ceiling on ad revenue is higher than for subscriptions. Netflix earns more revenue as ad-based users watch more programming. That helps explain why the company is no longer reporting subscriber numbers every quarter, though presumably it will give updates when it reaches them.

Looking ahead to 2030, Netflix is targeting $9 billion in ad revenue, up from an estimated $2 billion this year, as part of its plan to double annual revenue to $80 billion. It also aims to grow operating income from $10.4 billion last year to $30 billion.