-- Netflix (NFLX) is still set up for steady growth from price increases, ad revenue, a strong content lineup, and faster stock buybacks, even after it kept its 2026 outlook unchanged, UBS said in a note Thursday.
The company's Q1 came in ahead of its own forecast, helped by stronger member growth, lower churn across regions, and favorable foreign exchange, while the company's decision to keep its 2026 revenue growth outlook at 12% to 14% and margin target at 31.5% may disappoint some investors, it still has solid business momentum, the investment firm said.
Pricing remains a key support, with recent increases holding up well and more hikes in major markets likely to support average revenue per member grow throughout the year, UBS said, adding that it also expects advertising to become a bigger driver, saying the lower priced ad tier, new demand partnerships, and better ad fill rates should lift ad sales sharply in 2026.
Netflix should keep benefiting from a broad slate through the rest of 2026, including returning shows, new films, more live sports and events, and further expansion in games and mobile video, according to the note.
UBS kept its buy rating and $130 price target for Netflix, saying that investor sentiment could improve as Netflix's growth path, money making potential, and strong position in streaming come back into focus.
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