The company beat on earnings per share estimates and reported in-line revenue results. However, investors are excited about the company's beat on domestic and international subscriber growth. As a result, the stock is up by over $80 per share and is making new all-time highs.
Otherwise, competition from Hulu and HBO Now are actually good for Netflix, said Joseph Terranova, senior managing director at Virtus Investment Partners. He explained that the increased competition brings more awareness to Netflix, a service that is very attractively priced for consumers.
Several quarters ago there were questions about the company's international growth. However, those concerns have subsided and now investors need to consider Netflix as a core growth stock within their portfolio. "This is a great growth story," Terranova said, adding that a stock split would likely draw in more long-term investors.
This is a stock to buy on a pullback and own for the long term, he reasoned.
"The great growth stories throughout history were never cheap. They never gave you an opportunity to buy at a below-market multiple," said Josh Brown, CEO and co-founder of Ritholtz Wealth Management. For growth investors, Netflix has become a "must-own" stock, he added.
When Rich Greenfield, media and tech analyst at BTIG, assigned a buy rating and $600 price target to Netflix in October, people thought he was crazy. With the stock now trading at $555, $600 doesn't seem all that unrealistic. Customers love Netflix, as the average household with Netflix streams for an incredible two hours per day, he said.
The company will roll out its offerings in Japan this fall and still has South Korea to penetrate, Greenfield added. Consumers love ad-free streaming and its international rollout should continue to gain momentum. The unbundled streaming experience presents a problem to large traditional media companies, he added.
If you thought $600 was an egregious price target, Barton Crockett, an analyst at FBR Capital Markets, boosted his price target on Netflix to $900 and has an outperform rating on the stock.
Many hundreds of dollar per share ago, Crockett said the company's original content looked promising and would boost subscribers. But after a big rally in the stock price, he was unsure the company could successfully roll out its international plans.
Those doubts have been put to rest and he expects the company to grow its international subscriber count to 120 million by 2020. The earnings power for Netflix is very promising, he concluded.
Blackstone (BX) - Get Blackstone Inc. Report, Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. Report and Citigroup (C) - Get Citigroup Inc. Reportreported results. Terranova said to buy Goldman Sachs, WisdomTree Investment (WETF) - Get WisdomTree Investments, Inc. Report, Nasdaq OMX Group I:IXIC and JPMorgan Chase (JPM) - Get JPMorgan Chase & Co. Report. Citigroup is a hold.
Virtu Financial (VIRT) - Get Virtu Financial, Inc. Class A Report, Party City Holdings (PRTY) - Get Party City Holdco, Inc. Report and Etsy (ETSY) - Get Etsy, Inc. Report all debuted for trading on Thursday. Pete Najarian, co-founder of optionmonster.com and trademonster.com, said his top pick is Virtu Financial, which is a very consistent earner.
Terranova called Etsy somewhat overvalued, but reasoned that Party City has good retail locations and a strong brand. Jon Najarian likes Etsy.