Executives at Netflix (NFLX:NASDAQ) have set an internal target for the streaming giant to achieve a $1 trillion market valuation by 2030, according to reports. And analysts are rapidly buying into the firm’s ambitions after the company’s strong annual revenue outlook alongside earnings on 17 April helped ease concerns about the impact of economic uncertainty and rising tariffs.

The Wall Street Journal first reported that a recent strategy meeting saw Netflix leaders share their vision to double the company’s revenue and triple its operating income by the end of the decade, citing people who attended the meeting.

AMBITIOUS TARGETS

Ambitious targets for the next five years call for annual revenue of $80 billion, ad revenue of $9 billion, and $30 billion of total operating profit.

In 2024 (to end December), Netflix reported annual revenue of $39 billion, up 16% on 2023. Based on data from Statista and media publication Campaign, global ad revenue last year doubled to approximately $2.12 billion, and is set to double again in 2025.

Full-year 2024 operating profit was $10.4 billion, on a rough 27% operating margin.

Pivotal Research is among the growing number of analysts to back Netflix, raising its share price target to $1,350, and calling the company a winner in the global streaming war.

‘Netflix internal goal of reaching $1 trillion in market capitalisation by 2030 is reasonable,’ Pivotal Research analyst Jeffrey Wlodarczak wrote in a note to clients, ‘as the streaming giant is poised to benefit whether or not the US heads into a recession.’

Pivotal Research was one of several analysts to praise Netflix’s latest quarterly earnings and raise forecasts and price targets. Based on Koyfin data, the consensus target price for the stock over the next 12 months stands at $1,094.

At the time of writing, Netflix’s market cap stands at $420.4 billion, based on a $988.26 share price.

SUBSTANTIAL STREAMING GROWTH

The platform is experiencing substantial growth, and latest figures show it adding 18.9 million subscribers worldwide, bringing the total number of Netflix users to 301.6 million. The company’s executives are now aiming to increase this subscriber base to approximately 410 million by 2030, focusing on international markets, such as India and Brazil, for much of this expansion.

The company’s ad-supported tier, launched in late 2022, is gaining traction, accounting for 55% of Q1 2025 sign-ups in markets where it is available, according to the company.

While massive subscriber growth was the primary driver in 2024, Wedbush expects price increases to do much of the growth heavy lifting in 2025, and the ad tier to drive revenue higher in 2026, calling the stock ‘refuge from uncertainty’ due in part to a ‘virtually insurmountable lead in the streaming wars’.

By adding live events and broadening its content offerings, Netflix should be able to add more advertising revenue for the next several years, Wedbush analyst Alicia Reese wrote in a note to clients.

Yet investors should beware of fixating on the $1 trillion market cap target given the capricious nature of stock markets. Netflix’ next 12-months PE (price to earnings) multiple has swung wildly over the past two years, ranging from less than 25 to more than 43. It currently sits in the mid-30s.

Running some simple back-of-notebook calculations, 2030 $80 billion and $30 billion revenue and operating profit targets would imply something like $60 to $64 of EPS (earnings per share). Using a $62 mid-point, it implies a PE of about 38, and a rough $2,335 share price, would be required for the market cap to hit the $1 trillion mark. 

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