Netflix (NFLX) drew global headlines this month with its first-ever live sports broadcast, featuring a much-hyped bout between YouTuber Jake Paul and heavyweight champ Mike Tyson. The event set records for the streamer, with 65 million concurrent viewers at its peak. 

Despite the event's massive reach, many viewers reported glitches during the broadcast, including lengthy buffering and access delays. Traditionally not a broadcaster of live content, Netflix's Tyson vs. Paul match was intended to showcase its readiness to host similarly high-profile sports events later this year, including Christmas Day NFL games. 

Is now a good time to invest in the next growth phase of NFLX stock, or should investors stay cautious? Here's a closer look.

NFLX Stock Outperforms the Market

Valued at $383.7 billion by market cap, shares of Netflix have climbed 79% year-to-date, outperforming key streaming rivals like Disney (DIS), up 28%, and more diversified tech competitors like Amazon (AMZN), up 36.7%, and Apple (AAPL), up about 22%, which also have streaming entertainment divisions. For comparison, the broader Nasdaq-100 Index ($IUXX) has gained about 24.3% over the same time frame.

Longer term, NFLX stock has gained 1,648% over the past decade, easily outperforming the broader market.

Netflix Beats Q3 Earnings Estimates

On Oct. 17, Netflix reported its Q3 earnings for the fiscal year 2024, which surpassed Wall Street's expectations on both the top and bottom lines. The company reported $9.82 billion in revenue, up 15% year over year, and earnings per share (EPS) of $5.40, an increase of more than 44%. Analysts were looking for revenue of $9.77 billion on $5.09 per share in earnings.

Subscriber growth remained strong, with Netflix adding 5.07 million new subscribers, up 14% to 282 million.

Netflix strengthened its balance sheet, generating $2.19 billion in free cash flow, and ended the quarter with a cash balance of $7.45 billion. 

During the quarter, NFLX repurchased $1.7 billion in shares, with $3.1 billion remaining under its current authorization.

On the conference call with analysts, CFO Spencer Neumann confirmed that Netflix investors shouldn't expect a dividend anytime soon, explaining there are “no plans to increase leverage to buy back stock or to issue a dividend,” despite expectations for strong cash flow generation going forward. “We put a real premium on balance sheet flexibility,” added the CFO.

For fiscal Q4, Netflix guided for revenue growth of 14.7% to $10.12 billion, with earnings expected at $4.23 per share. 

What Do Analysts Expect for NFLX Stock?

With 41 analysts in coverage, NFLX stock has an average rating of "Moderate Buy" on Wall Street. The mega-cap stock has garnered 23 "Strong Buys," 2 "Moderate Buys," 14 "Holds," and 2 "Strong Sell" ratings.

Following what it described as the “mostly" successful Tyson-Paul event, Pivotal Research weighed in bullishly on NFLX stock. Telling clients that the glitchy match was a “learning experience” for Netflix, the brokerage firm raised its price target on Netflix all the way to a new Street-high of $1,100.  

In a note, analyst Jeffrey Wlodarczak cited Netflix’s “massive scale” and “large free cash flow” as key differentiators in the streaming wars, writing: “The key for [Netflix] going forward is to press their advantages and keep the subscriber/[average-revenue-per-user] flywheel going because the larger they get the more leverage they have over their peers/content creators, the better their product gets… and the bigger the moat grows around their core business model.” 

Netflix stock has already outpaced its average price target from analysts of $789.17, while Wlodarczak's new target suggests the stock can climb another 26%.

The Bottom Line on NFLX Stock

Netflix's potential to expand into live streaming could be a key growth driver for the company, as highlighted by recent events. However, technical hurdles, such as handling a large live streaming audience, must be overcome for Netflix to meet investors' expectations.

The strong price action in 2024 means NFLX isn't cheap, either, at 43.6x forward adjusted earnings. While this is roughly in line with the streaming giant's historical average multiple, it reflects the market's expectations for Netflix to keep delivering higher-than-average growth. 

While the company's strategic shift to live streaming content could help it to keep ahead of the curve - similar to the password-sharing crackdown, which was previously met with skepticism - investors who want to buy into the next phase of the Netflix growth story may want to consider doing so cautiously at the current valuation.