Is Netflix A Bargain?

Netflix stock rose from $35 to $300 a share in the 2 1/2 years ending in July. That's when investors should have sold because since then, the price has been halved.

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But there are still a few bulls who see the dramatic slide as a buying opportunity. Ingrid Chung at Goldman Sachs, for example, maintains her "buy" recommendation, telling clients the Reed Hastings-led company should climb back to $270 in the next six months (the stock closed at $128.53 Thursday).

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Chung says the recent defection of 1 million customers was due to unwarranted negative press about a Sept. 1 price increase and the split of the company's streaming service and DVD-by-mail, which will be called Qwikster. Would-be competitors, including Dish Network's Blockbuster, will find tough barriers to entering the subscription streaming business, she adds.

Piper Jaffray analyst Michael Olson also remains bullish on Netflix, with a price target of $300. But Piper Jaffray analysts acknowledge there are other dangers lurking. The firm wrote, "If Amazon or Google purchases Hulu, shares of Netflix would likely respond negatively."