Netflix shares rose about 3% on Monday after the streaming company reaffirmed its annual revenue forecast, assuring investors that it could withstand any economic downturn amid a tariff-laden economic climate.
The company's co-CEO Greg Peters noted that the entertainment sector, and Netflix (NFLX.O) specifically, had proven resilient during previous downturns.
Peters said on Thursday they had not seen any significant shifts in customer behavior, adding the company "still got hundreds of millions of folks to sign up."
The remarks offered some respite to investors who were worried that U.S. President Donald Trump's tariff policies could likely lead to a recession, forcing consumers to rein in spending on streaming services.
"Even in a global recession scenario, Netflix is likely to be highly resilient given the price-to-value of the service remains very attractive," said Jeffrey Wlodarczak, an analyst at Pivotal Research Group, who is five-star rated for both estimate accuracy and recommendation performance, as per LSEG data.
"Their advertising business should demonstrate strong growth in any scenario given its nascent state," Wlodarczak added.
Netflix reaffirmed its 2025 revenue forecast of between $43.5 billion and $44.5 billion and reported first-quarter earnings above analysts' expectations.
The lower-priced, ad-supported tier accounted for 55% of new sign-ups in countries where it is available, Netflix said.
"2025 is an important year for advertising monetization as Netflix moves from largely leveraging third parties to rolling out its own first-party advertising suite of products," Morgan Stanley analysts said.
Even if the macro economy softens, the brokerage said it remains confident in Netflix's ability to grow average revenue per member and scale up its advertising business.
At least 19 brokerages raised their price targets on Netflix's shares following the results, bringing the median target to $1,147.50.
