UP, UP, AND AWAY

In the battle between Netflix and everyone else, investors are betting heavily on Netflix

Obsession
Glass
Obsession
Glass

Media investors only have eyes for Netflix.

The streaming-video service marked a new milestone on Oct. 16 when it closed at $202.68—a level not seen since before its 2015 stock split—ahead of its third-quarter earnings release. The shares are currently trading just above $202.

Netflix’s stock, overall, has outperformed other media mammoths like the Walt Disney Company and Time Warner in 2017. Netflix’s total return rose 64% this year, as of Oct. 16. Competitor Time Warner, which owns HBO, Warner Bros., and DC Comics, had a 6% rise during the same period.

And 21st Century Fox—behind the movie studio and the Fox TV and news channels—and the Walt Disney Company—owner of Marvel, Pixar, and Lucasfilm—had declines. (Disney plans to begin its own rival streaming service in 2019.)

Netflix posted its best third quarter ever (pdf) in terms of subscriber growth on Monday. It added 5.3 million streaming subscribers during period ended Sept. 30—48% more than the same period a year earlier and above the 4.5 million FactSet analysts expected.

This without any major hits, no less. Netflix released Marvel’s The Defenders, the drama series Ozark, and the third season of Narcos during the quarter, but those titles don’t have the same popularity as a mega-hit like Stranger Things, which will premiere later this month.

Most of Netflix’s gains during the third quarter were overseas, which now makes up a larger share of subscribers than in the US.

The media behemoth expects to add another 6.3 million subscribers next quarter, bringing it to 22 million in gains for the full year, up from 19 million in 2016. Netflix forecasted in January (pdf) that the second half of the year would be stronger than the first thanks to its content slate, which includes not only Stranger Things, but David Fincher’s buzzed about new series Mindhunter, Steven Soderbergh’s Western Godless, the return of The Crown, and Netflix’s most ambitious film to date, David Ayer’s sci-fi thriller Bright.

That said, forecasts for the fourth quarter are modest compared to a year ago, when Netflix added a record 7 million subscribers. That could be the company hedging against any short-term impact from its recently announced rate hike.

The stock began surging last week after Netflix said it would raise prices for its most popular package and premium, 4K offering in the US. Some investors think the stock still has plenty of room to grow. One of the most bullish, Pivotal Research Group’s Jeffrey Wlodarczak, raised his price target from $200 to $270 today, reaffirming his buy rating.

The consensus of the 39 analysts on Wall Street is around $210.56, according to FactSet.


Read next: Netflix has more than 100 million subscribers—and it’s burning a lot of cash to keep hold of them

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