Netflix is already up 45% this year - here's why you might want to just 'buy the darn thing'
- Netflix shares are roaring in 2018 and could continue to do so for the rest of the year, says analyst Craig Huber of Huber Research Partners.
- Netflix is well positioned in the international market for video streaming, which will expand significantly.
- Netflix is also planning incremental price increases this year, which Huber believes will help increase revenue.
- Free cash flow may not be positive until 2022, but the stock is a good long-term buy, Huber said.
Netflix is up 45% so far this year, and that could be just the beginning, according to one of the company's most bullish analysts on Wall Street.
Craig Huber of Huber Research Partners told Business Insider he has a price target of $300, but that he "wouldn't be shocked if the stock is at $350" by the end of the year. Shares closed Monday's session just above $294.
And if the past is any indication of the future, Netflix is well positioned. Not only did it add a record number of subscribers in the fourth-quarter of 2017, but its also expanded at a faster clip internationally than in the US, as seen in the Statista Research chart below:
Huber's call is based on the potential for continued growth of online streaming in the international market. There is "a lot of room to grow the volume of Netflix users outside the US," he said.
And while Amazon Prime video streaming has been singled out as a threat to Netflix's overseas expansion, specifically in Asia, that doesn't bother Huber. "I'm not overly worried about Amazon prime frankly," he said.
But it's really Europe where Netflix will excel. "Europe is easier than certain other parts of the world because the broadband penetration is pretty high, and the households generally have more disposable income to afford Netflix," Huber added.
Plus, Netflix has the "pricing power to raise monthly prices every couple years," he said. The company raised the price of its standard plan in October by $1 to $10.99 a month, and could raise them again later this year, Huber said.
"I don't have estimated free cash flow at Netflix turning positive until 2022, you have to have a long term view of the stock," Huber concluded. "If you do you should buy the darn thing."