Netflix, Inc. (NASDAQ:NFLX) stock hit yet another 52-week high today, boosted by encouraging words in recent days from a former skeptic. The all-time high of $304.79 that it hit two frenzied summers ago — seemingly unattainable after the stock began its fiery crash later that year — is now just a 25% pop away.
Can it get there?
Kase Capital managing partner Whitney Tilson thinks Netflix could head higher. The money manager obviously didn’t always see things that way. He was vocally bearish on the company a few years ago, to the point where Hastings publicly called him out.
Hastings was persuasive. Tilson covered his short position early in 2011. He covered too late. He also bought in too soon, as Netflix, Inc. (NASDAQ:NFLX) shares peaked five months after Tilson’s turn.
However, it’s been a redemptive road for Tilson, Hastings, and Netflix bulls since the stock bottomed out below $53 this past summer. It has more than quadrupled in value since then.
Tilson’s argument that the shares are still a deal is flawed.
“They’re trading at $400 per subscriber in a world of $1,000 per sub,” he told Yahoo! Finance’s Breakout on Monday, but is it really fair to compare Netflix, Inc. (NASDAQ:NFLX) with wireless carriers and cable providers that milk far more out of the average subscriber?
The counter here is that Netflix has clear advantages over Comcast and its peers. Netflix, Inc. (NASDAQ:NFLX) doesn’t have to carry anything. Customers may object when a popular show or movie goes offline, but it’s not the uproar that cable customers would create if ESPN or AMC walked. It’s not the outrage that smartphone owners would be fired up with if connectivity coverage took a hit. In that sense, Netflix is a lot like Sirius XM Radio Inc (NASDAQ:SIRI), in that both companies are free to cherry-pick the content that makes financial sense. They’re premium-entertainment broadcasters, but they can be so on their terms.