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Where Will Netflix Stock End 2010?

(Netflix poll updated with new all-time high)

NEW YORK ( TheStreet) -- Netflix (NFLX - Get Report) stock hit yet another all-time high on Tuesday after reports of a possible merger with Apple (NFLX - Get Report) surfaced.

Glecher & Co. analyst Brian Marshall told CNBC that an Apple/Netflix deal makes sense. "You know, Apple wants to be the first company to seamlessly integrate the home office and the living room," Marshall said during the Fast Money segment. "What's limiting them now is basically content and better broadband into the home. In terms of content, they have over 10,000 titles on iTunes. Netflix has over 100,000 titles. That would be a pretty interesting marriage right there."

Shares hit a high of $179.56 in midday trading, before falling back slightly, to close up 6.5% to $177.62.

This is the second time over the past week Netflix reached a new high. Last week the company hit $174.94 after reporting third-quarter earnings. But can the Internet movie rental company continue on this run, or will shares fall back?

Netflix shares keep rallying even as third-quarter profit missed expectations. During the quarter, Netflix earned 70 cents a share, one cent shy of analysts' forecast.

Still, investors were wooed by the company's ability to grow its subscriber base by record numbers. Netflix gained 1.9 million new customers in the third quarter, a 90% surge from a little over 1 million new users in the second quarter. This marked the fourth consecutive quarter of more than 1 million new subscribers. The boost in users was driven by the launch of the Canadian streaming service in September, as well as new distribution platforms like Apple's (AAPL - Get Report) iPad and TV, along with Internet-enabled televisions and Blu-ray players.

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The company also upped its forecast for subscriber growth, and is now expecting between 19 million and 19.7 million subscribers by the end of the year, compared with a prior guidance of 17.7 million to 18.5 million.

Netflix is attributing much of this growth to its push to move from a DVD-by-mail company to a streaming company. During the quarter, the number of users who streamed content for more than 15 minutes was 66%, up from 41% in the third quarter of 2009 and 61% in the second quarter of this year.

Analysts, though, are questioning how much longer Netflix can continue to grow at its current pace, predicting expansion could slow as earlier as next year. Once this growth plateaus, Netflix's stock price will likely hit the brakes as well.

"In our view, the current valuation does not reflect the ongoing challenges in acquiring additional streaming content, nor the increasingly competitive landscape, as well-funded competitors (Google, Hulu, Apple) ramp up offerings," Susquehanna Financial analyst Marianne Wolk, wrote in a note.

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