Netflix (NASDAQ:NFLX) shares surged greater than 6% in premarket buying and selling on Friday after the streaming big reported fourth-quarter outcomes that confirmed wholesome positive aspects in subscriber progress, led by a powerful content slate, with analysts praising each the corporate’s monetary efficiency and its breath of choices.

Goldman Sachs analyst Eric Sheridan, who has a promote ranking on Netflix (NFLX), famous the optimistic tone on the earnings name as the corporate’s content appeared to resonate higher within the second-half, together with the roll-out of its ad-supported tier and password sharing restriction initiatives.

“In phrases of ahead debates, the flexibility of [Netflix management] to execute on these initiatives and the way they act as a catalytic path to return to double digit income progress coupled with upward margin trajectory and rising free money stream era will stay a key focus for traders,” Sheridan wrote in a word to shoppers.

“We agree that each of these choices have the potential to both open up avenues of recent subscriber progress and/or larger margin income {dollars} based mostly on opening up or capitalizing on market alternatives.”

Shares of different media corporations additionally rose in premarket buying and selling, together with Walt Disney (DIS), Paramount (PARA) (PARAA) and Comcast (CMCSA), amongst others.

KeyBanc Capital Markets analyst Justin Patterson, who has a sector weight ranking on Netflix (NFLX), referred to as the outcomes “stable,” including that the free money stream steerage of $3B was “higher than anticipated” and sure one of many key drivers for traders.

However, with the inventory having gained greater than 45% over the previous six months, its P/E is now again to ranges not seen since early final yr, which suggests much less room for a number of growth going into unknowns such because the elevated crackdown on password sharing, Patterson added.

Guggenheim Partners analyst Michael Morris stated the 7.7M subscriber addition within the fourth-quarter was “substantial” and with income and working revenue forward of consensus, the corporate is working properly, notable in gentle of the truth that Reed Hastings is stepping down as co-CEO to turn out to be Executive Chairman, with Greg Peters taking his place.

“We see Peters as providing complementary talent set to incumbent co-CEO Ted Sarandos,” Morris wrote in a word to shoppers.

Wolfe Research analyst Peter Supino boosted his per-share value goal to $417 on Netflix (NFLX) following the outcomes, noting it “bolstered our confidence within the subscriber outlook & working leverage alternative.”

Supino expects the corporate will add at the least 20M subscribers this yr, properly above the 13.5M consensus as a result of firm’s promoting tier, in addition to the paid sharing rollout, set to start out this quarter and the corporate’s outlook for “modest optimistic web provides” within the first-quarter, adopted by larger additions within the second.

In addition to the quarterly replace, Netflix (NFLX) stated it will resume share buybacks in 2023.