Despite triple-digit gains year-to-date, making the company’s stock the best performing one in the S&P 500 so far in 2013, Netflix (NFLX) has farther to climb, Andy Hargreaves of Pacific Crest Securities said Tuesday.
NFLX has posted a 52-week gain of nearly 221 percent compared to the broader S&P 500 Index (SPX) gain of 19.23 percent over the same period.
Speaking to CNBC’s “Fast Money”, Hargreaves said that the online video streaming service was uniquely positioned to see its subscriber base climb to about 50 million, sending its stock toward the $230 levels.
“It certainly is unprecedented territory for a premium service to get there, but the reality is there’s been no premium service that’s $8 a month that has the breadth and quality of content that Netflix has,” he said. “There also hasn’t been a service that has the device distribution that Netflix has and that people watch an hour and a half a day.
“And when you look at those numbers, they’re pretty unbelievable, quite frankly.”
Netflix has amassed a domestic subscriber base of nearly 30 million. Hargreaves believes that Netflix’s potential subscriber base could be as high as 70 million.
“None of us know, but it’s a heck of a lot bigger than any premium service has gotten to today,” he added. Netflix signed up more than 2 million domestic streaming subscribers in the first quarter. However, the company expects that growth to slow. For the second quarter overall, the company expects to add only 230,000 to 880,000 new U.S. streaming customers.
NFLX was down 1.25 percent at $212.90 late in the trading day. After bottoming out below $53 this past summer (August 3, 2012), the ticker has more than quadrupled in value since then.
Netflix has traded in a 52-week range of $52.81 – $248.85.