11:44 AM EDT, 07/19/2024 (MT Newswires) -- Netflix ( NFLX ) is building a nearly insurmountable lead over would-be competitors, Wedbush said in a new research note on Friday, writing those rivals have been largely left "to flail" while trying to replicate its increasingly lucrative business model.

Netflix ( NFLX ) late Thursday reported Q2 results that breezed past Wall Street forecasts and it also raised its 2024 outlook, with Wedbush analysts expecting the streaming company, in particular, to continue reaping significant financial benefit through its ad-supported subscription tier for several more years.

According to Wedbush, the ad tier is working for Netflix ( NFLX ) by keeping subscribers from frequently jumping back and forth from one streaming service to another and the company appears poised to keep increasing revenue from advertising sales and expanding partnerships. It also plans to add more live events - including professional football and WWE wrestling - in the future, helping the ad tier to become the primary driver growth at Netflix ( NFLX ) by 2026, the analysts said.

"We think Netflix ( NFLX ) has reached the right formula with global content creation, balancing costs and increasing profitability," the Wedbush analysts said, reiterating an outperform stock rating. The analysts also kept their $725 price target for the company's shares, explaining it reflects a multiple of 27 times the company's expected 2026 per-share earnings, more than doubling its EPS in 2023 "and supporting its premium valuation."

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