Netflix (NASDAQ: NFLX) hit another all-time high on Tuesday. Shares of the world's leading premium streaming service have soared 68% in 2024. The stock has nearly tripled since the start of last year.

Investors aren't complainingobviously. Howeverit's not as if Netflix's subscriber base or revenue has soared 178% since the start of 2023. The shares may seem to be outrunning the fundamentalsbut let's reset the starting line. The stock is up just 17% since the first time Netflix topped $700 three Novembers ago. The business has definitely improved by a lot more than 17% over the past 36 months.

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The stock is rolling. Can it keep those reels turning in 2025? Let's take a closer look at what Netflix stock has to do to keep hitting new highs in the year ahead.

Financials worth binge viewing

Last month's strong financial update sent the shares soaring. Revenue rose 15% to $9.8 billion in the third quarterfueled largely by a 14% increase in subscribers. Folks are also paying more for their subscriptionsparticularly in its home marketas U.S. and Canadian users are paying an average of 5% more than they were a year ago.

The bottom line fared even better. Rising margins sent the operating margin and earnings per share soaring 52% and 45%respectively. It was a sound beat on both ends of the income statement. Netflix was initially forecasting a 14% increase in revenue and a 33% jump in net income.

Netflix now expects revenue to grow at a 15% clip for the current quarter as well as for all of 2024. This follows back-to-back years of single-digit top-line gainsso the acceleration is relevant. It does see revenue slowing to between 11% and 13% in 2025but that's just part of the story. Netflix sees its operating margin widening slightly in 2025so profitability should continue to outpace its double-digit revenue growth spurt.

Staying one step ahead

Netflix may not seem cheap. It's trading for 35 times next year's analyst profit target. But let's see how things will play out. You could've bought Netflix for just 12 times its latest 2025 earnings estimates at the start of last yearbut at the time Wall Street pros figured the streaming leader would be earning a lot less.

A lot of interesting things are happening at Netflix. It's been two years since it announced a cheaper ad-supported plan. Initial results were encouraging. Cash-strapped viewers got a price break. Advertisers got a way to reach an audience they weren't able to reach before. It was a win-win-win initiativewith Netflix coming out of it with the widest grin.