Netflix reported second-quarter earnings that beat Wall Street estimates. Despite concerns to the contrary, the company returned to profitability in Q2 and anticipates staying there in Q3, though it did leave room in its guidance for a loss. I can really only pull two negatives out of the report. One, Netflix thinks the Olympics might hurt Q3 viewing and sign-ups. This could cause the company to miss full-year guidance of 7 million domestic net subscriber additions. Honestly, I think that's Reed Hastings resetting expectations too low. He overstates the potential impact of the Summer Games. Translation: Nobody in America really cares about them. It's like saying the Stanley Cup Playoffs or this weekend's golf tournament will hurt Netflix. Two, Netflix will enter an additional international market in Q4. It warns in its Q2 letter to shareholders that this expansion will "temporarily" push the bottom line "back into the red."
Hastings masterfully took control of the conversation on yesterday's call. He altered its course. He provided analysts and investors with a different lens with which to view Netflix's future. At one point, Hastings said: "We have enormous challenges ahead, and no doubt will have further ups and downs as we pioneer Internet television." "As we pioneer Internet television." Whether it was the case or not, for most of 2011, Hastings made it sound like Netflix's cash was going into a black hole of content acquisition. And in some respects, it was. On yesterday's call, Hastings repositioned Netflix as a company with a clearly defined purpose.
In other words, I sense a transition to a model that stresses quality over quantity and serves lucrative niches as opposed to a loosely defined audience of everything and everybody. I recently rejoined Netflix and feel like its streaming value proposition has increased markedly from the beginning of the year. It's much less random than it used to be. It doesn't happen all that often, so when it does I have to get all narcissistic on you. I am ahead of the curve on this stock. I called the implosion way before it happened. And now, I'm ahead of the pack on the forthcoming uptrend. I'm giving Netflix another six to eight months. If things continue to progress, I might buy the stock. I'm fully confident NFLX will breach $50 by the end of January 2013 -- around the time the company reports that Q4 loss. The time to buy will be after the Q4 report early next year. Follow @RoccoPendola At the time of publication, the author held no positions in any of the stocks mentioned in this article. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.