Netflix just crushed earnings, but can it grow to $300 billion?

Business Insider CEO Henry Blodget looks at Netflix following the company’s earnings report, which saw the stock surging to a new high. He discusses the main thesis of Netflix, which is that it’s a modern TV network, and points out that most of the company’s growth is coming from overseas. Blodget reminds CEOs that it’s not imperative to just maximise profits — that it’s OK to reinvest in your own business and still be rewarded in the stock market. In terms of Netflix’s future valuation, he says that the company will need $US7 billion to $US8 billion of EBITDA and trade at 15-20x to support a $US100 billion market cap.

Business Insider executive editor Sara Silverstein points out that Netflix just increased its prices, but still has more room to raise them in the future. Blodget agrees in the company’s untapped pricing power, and then Silverstein points out that it still has great merchandising potential. In terms of how big the company can get, Blodget again highlights just how far the company has to go on an EBITDA basis to achieve the $US300 billion valuation floated by NYU professor and author Scott Galloway on last week’s show.

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