Netflix, Inc. (NASDAQ:NFLX) shares rose in premarket trading on Thursday after the company expanded its stock buyback plan and reinforced its growth outlook.
According to an exchange filing, the streaming giant approved a fresh $25 billion repurchase authorization, adding to an earlier program announced in December 2024.
The combined plan carries no expiration date and offers flexibility in execution.
Share Repurchase Strategy Expands
The board approved additional capital returns as management seeks to optimize shareholder value.
The company still had about $6.8 billion remaining under its prior authorization at the end of March.
Combining the new $25 billion, the total buyback could go as high as $32 billion, which amounts to about 8% of Netflix’s total market cap. This tantamounts to a significant investment in its own stock.
Netflix said it may conduct buybacks through open-market purchases or structured trading plans. It may also use privately negotiated deals, block trades or accelerated programs.
The company emphasized it has no fixed obligation to repurchase shares.
Warner Merger Failure
The huge buyback comes after Netflix stepping away from a proposed acquisition of Warner Bros. Discovery (NASDAQ:WBD) assets.
The move underscores Netflix’s continued emphasis on organic growth.
After the merger was dropped, Bank of America Securities analyst Jessica Reif Ehrlich maintained a Buy rating on Netflix, adding that Netflix still has meaningful expansion potential.
The platform remains less than 50% penetrated across global connected TV households, leaving room for subscriber growth in both mature and emerging markets.
First-Quarter Performance
Earlier this month, Netflix posted first-quarter revenue of $12.25 billion, exceeding Wall Street projections. Adjusted earnings came in at $1.23 per share, surpassing analyst expectations.
Revenue climbed 16% from the previous year, supported by subscriber gains, pricing adjustments and advertising growth. The company noted that membership expansion drove results beyond internal forecasts.
Outlook Signals Near-Term Cost Pressure
Netflix expects second-quarter revenue to reach $12.57 billion, alongside projected earnings of 78 cents per share. The company flagged rising content amortization as a near-term headwind.
“We expect Q2 to have the highest year-over-year content amortization growth rate in 2026, before decelerating to mid-to-high single-digit growth in the second half of the year,” the company said.
Netflix reaffirmed its full-year revenue outlook of $50.7 billion to $51.7 billion. The guidance reflects confidence in sustained user growth and monetization improvements.
Analyst Consensus & Recent Actions
The stock carries a Buy rating with an average price target of $114.15. Recent analyst moves include:
- Piper Sandler: Overweight (Raises target to $115.00) (April 17)
- Oppenheimer: Outperform (Lowers target to $120.00) (April 17)
- Barclays: Equal-weight (Lowers target to $110.00) (April 17)
Top ETF Exposure
- The Communication Services Select Sector SPDR Fund (NYSE:XLC): 5.71% weight
- First Trust Dow Jones Internet Index Fund (NYSE:FDN): ~9% weight
Significance: Because Netflix holds meaningful weight in these ETFs, fund flows can influence buying or selling activity in the stock.
NFLX Price Action: Netflix shares were up 1.33% at $94.48 during premarket trading on Thursday, according to Benzinga Pro data.
Image via Shutterstock
