It's increasing its streaming service. It's capturing more customers. It's crushing its rivals like so many cockroaches.

It's good to be Netflix ( NFLX - Get Report).

And it got especially good today, when the DVD-delivery service was upgraded by an analyst at Wedbush Morgan to buy from hold, sending shares soaring 7% to close at $40.40.

"The company continues to attract customers from brick and mortar chains, and continues to retain customers by offering its unique streaming proposition," Wedbush Morgan analyst Michael Pachter wrote in a note.

Netflix has been steadily **growing market share, and is poised to surpass Blockbuster ( BBI) as it ramps up its streaming service, cutting postage costs for physical DVDs and boosting profit margins.**

It begs the question: Why would anyone drive to a Blockbuster store when they can get DVDs delivered straight to their mailbox or home computer? The answer: They're not.

In April, Netflix posted a 68% surge in first-quarter earnings to $22.4 million, or 37 cents per share, and said it has added 1.6 million subscribers since September, giving it more than 10 million customers.

Blockbuster, on the other hand, saw profits plunge 42% in its first quarter, to $24.9 million, or 12 cents a share.

And while investors may fear that newcomer Redbox -- which has DVD kiosks in retail outlets such as Wal-Mart Stores ( WMT - Get Report) and J.C. Penney ( JCP - Get Report) -- may pose a risk to Netflix, Mark Mahaney, analyst at Citi, said in a note on Wednesday the threat is actually to Blockbuster, and other rental chains.

Redbox, which is owned by Coinstar ( CSTR - Get Report), is more popular for new releases, while consumers turn to Netflix for older films, Mahaney wrote.

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