11:56 AM EDT, 05/20/2024 (MT Newswires) -- Netflix ( NFLX ) has a "virtually insurmountable lead in the streaming wars" and it's now positioning itself to increase advertising revenue, Wedbush said Monday in a note to clients.

The streaming giant's rivals will likely "continue to flail while trying to replicate Netflix's ( NFLX ) business model," said Wedbush analysts including Alicia Reese.

Meanwhile, the company's "advertising tier should reap benefits for several years," the analysts said.

"The biggest benefit of the ad tier so far is that it limits churn," the note said. "Netflix ( NFLX ) is positioning to accelerate ad tier revenue contribution into year-end and 2025 as it improves its advertising solutions and targeting, expands partnerships, and adds more live events."

The company has "reached the right formula with global content creation, balancing costs, and increasing profitability," the analysts said, adding the company will likely "continue to expand profitability and generate increasing free cash flow."

Catalysts for the company include the "full digestion of the advertising potential of upcoming live events, including NFL games and WWE in 2025 and beyond," the analysts said.

"While Netflix ( NFLX ) does not plan to advertise outside its ad tier for all live events, NFL games could draw significant advertiser interest, given Netflix's ( NFLX ) reach," the analysts noted.

Wedbush reiterated Netflix's ( NFLX ) outperform rating and $725 price target.

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