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Can Netflix's Content Strength Drive User Engagement & Revenue Growth?
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Key Takeaways
Netflix reported 95B viewing hours in the first half of 2025, underscoring strong user engagement.
New releases like The Witcher and The Great Flood aim to power subscription and ad growth.
Ad sales are set to double in 2025 as Netflix expands targeting and AI-driven content strategies.
Netflix (NFLX - Free Report) is strengthening its focus on international content as its most powerful growth catalyst. With a vibrant lineup of the latest originals and returning global hits, the company aims to boost user engagement and maintain its leadership in the streaming market. In the first half of 2025, Netflix reported that users watched more than 95 billion hours of content.
As it moves through the last leg of 2025, Netflix follows a clear approach where quality content builds engagement, engagement enhances retention and retention drives revenue across both its subscription and advertising tiers.
Management reaffirmed its 2025 revenue guidance of $44.8-$45.2 billion, indicating 15-16% year-over-year growth, supported by a robust release lineup. Upcoming series such as The Twits (the U.K., Oct. 17), Romantics Anonymous (Japan, Oct. 16), The Witcher Season 4 (Oct. 30) and The Beast in Me (Nov. 13) are poised to sustain engagement and drive subscription growth.
On the film side, releases such as The Great Flood (South Korea, Dec. 19), A Merry Little Ex-Mas (the United States, Nov. 12) and Wake Up Dead Man: A Knives Out Mystery (Dec. 12) underscore Netflix’s ability to combine local storytelling with global appeal, reinforcing its dominance in viewership across key markets.
Netflix’s ad-supported tier and pricing optimization strategy are emerging as key growth engines. The company expects ad sales to double in 2025, supported by better targeting and measurement tools.
Netflix’s focus on franchise building, gaming extensions and AI-enhanced content recommendations is expected to strengthen engagement depth. The Zacks Consensus Estimate indicates year-over-year revenue growth of 15.5% for 2025 and 12.8% for 2026, reflecting growing investor confidence.
Amazon, Disney Rise as Netflix’s Toughest Rivals
Amazon (AMZN - Free Report) powers its massive ecosystem, spanning e-commerce, AWS and logistics, to give Prime Video a competitive edge. Amazon’s 10% subscription growth and $1.8 billion in ad commitments highlight its streaming momentum.
With a larger content library, live sports and bundled Prime perks, Amazon challenges Netflix’s dominance by combining entertainment, convenience and value, positioning itself as a powerhouse redefining competition in the global streaming landscape. Amazon has more than 310 million active users worldwide as of May 2025.
Disney (DIS - Free Report) leverages its unmatched portfolio, including Marvel, Star Wars, Pixar and classic animation, to give Disney+ an edge over Netflix. Disney’s strategy of bundling Disney+, Hulu and ESPN+ boosts engagement and subscriber value, while its diversified revenues from parks, films and merchandise support content investment.
With 127.8 million subscribers as of June 2025, Disney continues to scale globally, combining family appeal, premium quality and affordability to challenge Netflix’s streaming dominance.
From a valuation standpoint, Netflix is trading at a forward 12-month price-to-sales ratio of 9.91 compared with the broader Zacks Broadcast Radio and Television industry's forward earnings multiple of 4.78X. NFLX carries a Value Score of D.
NFLX’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NFLX’s 2025 revenues is pegged at $45.03 billion, reflecting 15.47% year-over-year growth. The consensus mark for 2025 earnings is pegged at $26.06 per share and has been unchanged over the past 30 and 60 days. This indicates a 31.42% increase from the previous year.
Image: Bigstock
Can Netflix's Content Strength Drive User Engagement & Revenue Growth?
Key Takeaways
Netflix (NFLX - Free Report) is strengthening its focus on international content as its most powerful growth catalyst. With a vibrant lineup of the latest originals and returning global hits, the company aims to boost user engagement and maintain its leadership in the streaming market. In the first half of 2025, Netflix reported that users watched more than 95 billion hours of content.
As it moves through the last leg of 2025, Netflix follows a clear approach where quality content builds engagement, engagement enhances retention and retention drives revenue across both its subscription and advertising tiers.
Management reaffirmed its 2025 revenue guidance of $44.8-$45.2 billion, indicating 15-16% year-over-year growth, supported by a robust release lineup. Upcoming series such as The Twits (the U.K., Oct. 17), Romantics Anonymous (Japan, Oct. 16), The Witcher Season 4 (Oct. 30) and The Beast in Me (Nov. 13) are poised to sustain engagement and drive subscription growth.
On the film side, releases such as The Great Flood (South Korea, Dec. 19), A Merry Little Ex-Mas (the United States, Nov. 12) and Wake Up Dead Man: A Knives Out Mystery (Dec. 12) underscore Netflix’s ability to combine local storytelling with global appeal, reinforcing its dominance in viewership across key markets.
Netflix’s ad-supported tier and pricing optimization strategy are emerging as key growth engines. The company expects ad sales to double in 2025, supported by better targeting and measurement tools.
Netflix’s focus on franchise building, gaming extensions and AI-enhanced content recommendations is expected to strengthen engagement depth. The Zacks Consensus Estimate indicates year-over-year revenue growth of 15.5% for 2025 and 12.8% for 2026, reflecting growing investor confidence.
Amazon, Disney Rise as Netflix’s Toughest Rivals
Amazon (AMZN - Free Report) powers its massive ecosystem, spanning e-commerce, AWS and logistics, to give Prime Video a competitive edge. Amazon’s 10% subscription growth and $1.8 billion in ad commitments highlight its streaming momentum.
With a larger content library, live sports and bundled Prime perks, Amazon challenges Netflix’s dominance by combining entertainment, convenience and value, positioning itself as a powerhouse redefining competition in the global streaming landscape. Amazon has more than 310 million active users worldwide as of May 2025.
Disney (DIS - Free Report) leverages its unmatched portfolio, including Marvel, Star Wars, Pixar and classic animation, to give Disney+ an edge over Netflix. Disney’s strategy of bundling Disney+, Hulu and ESPN+ boosts engagement and subscriber value, while its diversified revenues from parks, films and merchandise support content investment.
With 127.8 million subscribers as of June 2025, Disney continues to scale globally, combining family appeal, premium quality and affordability to challenge Netflix’s streaming dominance.
NFLX’s Price Performance, Valuation & Estimates
Shares of Netflix have gained 29.4% year to date compared with the Zacks Broadcast Radio and Television industry’s rise of 27.2% and the Zacks Consumer Discretionary sector’s return of 8.5%.
NFLX’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Netflix is trading at a forward 12-month price-to-sales ratio of 9.91 compared with the broader Zacks Broadcast Radio and Television industry's forward earnings multiple of 4.78X. NFLX carries a Value Score of D.
NFLX’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NFLX’s 2025 revenues is pegged at $45.03 billion, reflecting 15.47% year-over-year growth. The consensus mark for 2025 earnings is pegged at $26.06 per share and has been unchanged over the past 30 and 60 days. This indicates a 31.42% increase from the previous year.
Image Source: Zacks Investment Research
NFLX currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.