The One Stock up 80% in 2016

Netflix Interface - big pic

That's right, it's Netflix.

Netflix Inc (NFLX) has beat the Dow Jones Ind. average 80 times over in 2015. An incredible ride for anyone who put their faith in the streaming giant earlier in the year.

Netflix closed today at $624.38 a share with puts its market cap at over $37.9 billion. The ride has been incredible from the $300 range at the start of the year to over $600 today.  The price-to-earnings multiple is scary on the stock clocking in at 162. How can this be happening?

The company continues to get love from the analysts covering the stock. Last week Cowen sees +100M Netflix international subs by 2020:

  • Cowen Research projects Netflix (NASDAQ:NFLX) will have 104M international subscribers by 2020 after modeling the company's growth in 50 different nations.
  • Guidance from Netflix is for the company to have 22.78M international streaming members by the end of the current quarter.

That same week RBC Capital set a price target of $700 on NFLX.  The week before Pivotal Research set its price target on NFLX at $850 after factoring in favorable China and South Korea penetration rates.

Do you chase the stock after it's massive climb?

Buyer beware when you consider all of the analysts covering NFLX.  The average price target is $592.  Many of the firms covering NFLX have yet to increase their target prices. This stock has been flying so high and quickly that it's difficult to justify a higher price move.  

Bottom line: NFLX continues to run despite its insane valuation. Nobody is willing to challenge NFLX at this level but at any miss the stock could fall like a rock.