Netflix stock retreated Wednesday after hitting a 52-week high a day earlier. Shares of the subscription video-on-demand service have nearly doubled in the past year.
Wedbush Securities analyst Alicia Reece reiterated her outperform rating on Netflix stock and raised her 12-month price target to 725 from 615.
However, the investment firm removed Netflix from its "best ideas list" after a steep run-up. In the past year, through Tuesday's close, Netflix stock had risen 92%.
"We think it will be much harder for Netflix to impress investors in 2024 vs. 2023," a Wedbush report said. "Some of the growth drivers have been fully priced in, such as the password-sharing crackdown."
In intraday trading on Tuesday, Netflix stock notched a 52-week high of 634.39.
On the stock market today, Netflix stock fell 2.5% to close at 613.53.
Netflix Stock Is On 3 IBD Lists
Netflix still has room to run this year, Reece said in a client note Wednesday.
"As long as global trends remain consistent and the ad market continues to improve this year, we expect Netflix to continue to report strong results," she said.
Netflix has a significant opportunity to expand its advertising-supported service. But the ad business still needs to scale to be accretive to the company's earnings, Reece said.
"We think Netflix has reached the right formula with global content creation, balancing costs, and increasing profitability," she said.
The next potential catalyst for Netflix stock could be the company's first-quarter earnings report, due on April 18.
Netflix stock is on three IBD stock lists: IBD 50, Big Cap 20 and Stock Spotlight.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
