Netflix shares are exploding higher and one analyst has a stunning new prediction for the stock

Reed HastingsGettyNetflix CEO Reed Hastings


That is where Barton Crockett, an analyst at research firm FBR & Co., thinks shares of Netflix are headed.

In pre-market trade on Thursday, shares of Netflix were up more than 12% to $US537 per share after the company reported earnings on Wednesday night that showed subscriber growth widely topping expectations.

In the first quarter, Netflix added almost 5 million streaming subscribers (4.88 million), beating its expectations by 21%.

Crockett thinks this number puts Netflix on track for net subscriber additions of around 5.6 million in the US this year, and 10 million internationally.

As the core of his thesis for why Netflix shares could headed almost 70% higher, Crockett cites a survey conducted by his firm and a research partner that shows US households with Netflix prefer the service to TV.

Here’s Crockett:

The key driver is our proprietary survey work, in collaboration with ClearVoice Research, LLC, which says that domestic Netflix subscribers — nearly 40% of TV households in the U.S. — love the service more than TV. Our survey (conducted in early April across more than 2,000 consumers representative of the U.S. in key demo categories) is consistent with the robust embrace apparent in Netflix’s 1Q15 earnings report, post-close Wednesday, April 15. In this outpouring of affection, we see Netflix as very likely to move towards 180 million global subscribers by 2020 (over 60 million in the U.S.) and, over time, enjoy mid-single-digit-plus ARPU growth.

Crockett added that 57% of the 800 Netflix subscribers surveyed said that they would keep Netflix over traditional TV if forced to choose, and 49% of Netflix subscribers surveyed said they spend more time watching Netflix than TV.

But $US900 is still a stunning call for a stock that is up more than 600% since its most recent bottom in December 2011.

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