Netflix Stock Jumps 24 Percent
UPDATED: "We see improving content and consumer acceptance driving a surge in profitable domestic streaming growth," said an analyst who raised his price target by $50.
Shares of Netflix surged 24 percent on Tuesday, one day after the company said it added more than 2 million subscribers in the latest quarter and turned a profit, whereas in the same quarter a year ago, it lost money.
Netflix stock rocketed $42.62 to $216.99. In midday trading, it hit $219.38, a 52-week high.
The stock got several positive -- and a few negative -- mentions from analysts Tuesday.
Lazard Capital Markets upped its target price by $50 to $250. "We see improving content and consumer acceptance driving a surge in profitable domestic streaming growth," analyst Barton Crockett wrote.
One contrarian was Alan Gould of Evercore Partners, who noted the big surge in stock price and told clients on Tuesday: "Netflix reported a good quarter, but the results in our opinion do not justify a $3.3 billion, or 33 percent, increase in the company's market cap in one day."
Cowen and Co. analyst John Blackledge said the stock is so high now that he is "cautious." He rates the stock "neutral" and says he might raise his expectations if Netflix raises its prices.
The most bearish analyst, Michael Pachter of Wedbush Securities, raised his price target by $10 to $65 and maintained his "underperform" rating.
In his "sum-of-the-parts" analysis, he says the company's domestic streaming business is worth $32.50 a share and international streaming is worth $7. The domestic DVD business is worth $19.60 and the company has net cash of $5.42.
Netflix said Monday that it earned $2.7 million in the latest quarter on $638.6 million in domestic streaming revenue. It added 2.03 million streaming subscribers in the U.S. for a total of 29.2 million.