As Netflix (NFLX) gears up to report fourth quarter earnings results on Thursday, analysts are reiterating the strength of the company heading into 2022 — despite last year's hurdles.
Netflix has already set the tone for the upcoming year, hiking its U.S. basic plan by $1 to $9.99 per month. A standard plan now costs $15.49 (up from $13.99.), and the company's premium plan increased to $19.99 per month from $17.99.
According to a new note from Bank of America, which maintained a "Buy" rating on the stock, last year was a "tough year" for the streaming giant — but 2022 should "get better" thanks to "a massive content slate lineup" and "continued growth in Asia."
The bank added that there is "opportunity for subscriber upside and potential for new subscriber models as key positive stock drivers in 2022," despite increased competition.
Additionally, the analysts called out Netflix's recent price hikes, which they say could add incremental revenue of $960 million. The streaming giant made the surprise announcement late last week, hiking prices across the board.
"We understand people have more entertainment choices than ever and we’re committed to delivering an even better experience for our members," a spokesperson told Yahoo Finance at the time.
Although Bank of America warned that this could lead to an increase in churn amid an already high inflationary environment, analysts have noted price elasticity when it comes to Netflix subscribers.
In 2021, the stock underperformed the S&P 500 after a blockbuster 2020 that saw streaming players soar on the heels of COVID-19 lockdowns. Fueled by the shift to remote work and online school, subscriber numbers surged by a record 25.9 million additions in the first half of 2020, before dropping off significantly as the effects that bolstered the "stay at home" trade ran its course.
Netflix's most recent quarter saw just 4.38 million sign-ups; however, that number still beat Wall Street expectations of 3.72 million and was a solid rebound from the second quarter, when just 1.5 million new paying users joined the streaming service.
"Squid Game" played a large role in Netflix's third quarter earnings pop. A record 142 million people watched the hit South Korean show in its first four weeks.
As content remains a key driver for global growth, Netflix will have some heavy hitters to rely on with "Ozark," "Bridgerton," "Stranger Things" and "The Crown" all set to make triumphant returns this year.
During its last earnings report, the company added that it will switch to reporting hours viewed for its shows instead of the number of accounts watched.
Since then, the new model has underscored the importance of international content, with many non-English shows dominating its top 10 list. Credit Suisse, which maintains an "Outperform" rating on the stock, noted how this adds to the company's bull case as subscriber growth in international markets like Asia take hold.
Coupled with a massive content lineup and tangible path forward to revenue for its fledging gaming division, 2022 should be a watershed year for Netflix — baring any major disruptions from competitors, economic re-openings or inflationary pressures.
Alexandra is a Producer & Entertainment Correspondent at Yahoo Finance. Follow her on Twitter @alliecanal8193