How High Can Netflix (NFLX) Go?

Three months ago, Netflix (NASDAQ: NFLX) was the sad story of a once up-and-coming stock that had fallen on some very hard times. Now it’s the darling of the stock market again.

Since dipping to $60 on October 24, Netflix shares have been on a tear, more than tripling to $184 a share after today’s 6% boost. The tech stock hasn’t been this high since September 2011.

Of course, Netflix is far from all-time highs. Shares of the video subscription business once topped $300 back in July 2011. That was before company CEO Reed Hastings made a series of very public gaffes, including an ill-advised attempt to split into two websites and an embarrassing late-night apology email to subscribers.

The bad publicity that accompanied Hastings’ missteps sent the stock on a downward spiral. Netflix shares plummeted 80% in a matter of two months. The stock remained in a funk for close to a year. Now it’s one of the fastest-rising stocks on the market.

How long can Netflix continue its amazing comeback? A forward P/E of 69 suggests that the run may be coming to an end soon. Most analysts agree – the mean price target among 26 Thomson Reuters brokers is $124. However, at least one analyst thinks the stock could continue on up to $200 a share.

As a company, the worst appears to be over for Netflix. After losing money in the first quarter of 2012, the company has steadily grown its profits each of the last three quarters. With expansions into Latin America and Europe just starting to take hold and the company having just inked an unprecedented deal to air Disney (NYSE: DIS) movies immediately following their theater runs, there’s plenty of more room for growth.

It’s doubtful the stock will triple again in the next three months. But Netflix’ future still looks much brighter than it did in the fall.

*Full disclosure: I currently own shares of Netflix.

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