NEW YORK (TheStreet) -- Netflix's (NFLX) - Get Report opportunity to expand into Europe is big, as the company moves its services into Germany, Austria, Switzerland, France, Belgium and Luxembourg. The sheer scale of the opportunity, however, may surprise everyone, including Netflix.

Cantor Fitzgerald analyst Youssef Squali believes that Netflix could add as many as 24 million additional subscribers to its already burgeoning empire, which has 48 million subscribers, at a much faster rate than anyone believed, given management's public comments. "This move goes well beyond initial expectations of Germany, France, or maybe both, and adds ~62M European broadband households (BB HHs) to the company's TAM, by our estimate," Squali wrote in the note. "Assuming ~30% penetration (vs. US at ~40%), these countries could contribute ~24M additional subscribers over time." Squali rates Netflix "buy" with a $425 price target.

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In the press release on Wednesday that outlined its expansion plans, Netflix didn't disclose pricing, programming and supported devices, noting that the information "will be available at a later date."

Most of the additional 62 million households are in Germany and France, two of the largest economies in Europe. Germany has approximately 28.3 million broadband households, while 24.2 million broadband households are in France. These two countries are where Netflix will face its largest competition, as Amazon's (AMZN) - Get Report Lovefilm is already entrenched in Germany, and France has tough regulatory rules.

Squali estimates there are 3.8 million broadband households in Belgium, 3.5 million in Switzerland, 2.2 million in Austria, and around 175,000 in Luxembourg, giving Netflix the opportunity to expand its international presence.

Netflix's international performance continues to strengthen, Hastings said in a letter to shareholders discussing first-quarter earnings last month. Netflix added 1.75 million international subscribers during the quarter, bringing its total to 12.7 million members.

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"Due to rapid growth in our international segment we aren't experiencing the same level of seasonality as in the U.S., and we anticipate over 50% y/y growth in Q2 net additions despite slight headwinds from the World Cup," Hastings wrote.

The company's latest moves into additional European countries serve to address that strength and will continue to push the ball forward, even if it means losses in the company's international segment. Hastings noted the company is on a path to achieve profitability this year from its international ventures, but through continued and substantial expansion in Europe, along with investments in content and marketing, the unit will operate at a net loss.

Netflix CFO David Wells recently noted that there could be as many as 700 million global broad households (around 100 million in the U.S. and 200 million in China), with Netflix's total opportunity overseas between 100 million and 133 million. "Assuming mid- to high-single digit CAGR in BB subscribers worldwide, our ~60M total international streaming subscriber forecast in 2021 implies ~30% penetration," Squali penned in the note. "We believe this level is achievable/reasonable considering that U.S. penetration is currently ~40% (Netflix boasts 35.7M domestic streaming subscribers on 91.3M fixed broadband subscriptions, according to OECD) and that Canada hit ~10% of BB HH within 12 months of launch."

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--Written by Chris Ciaccia in New York

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