BofA says Netflix has another 22% to rise even after monster earnings gain

Netflix dropped blockbuster Q4 earnings results, topping 300 million subscribers for the first time, sending the stock up over 10% today. Bank of America analysts think the platform has even more upside, raising their price target to $1,175, a 22% premium over where it’s trading as of 1:20 p.m. ET.

Analyst Jessica Reif Ehrlich wrote:

“In our view, this quarter reflects the robust platform Netflix has created as it remains one of the best positioned companies in media with several growth drivers, including the accelerating ramp of its burgeoning ad business (as Netflix appears to have reached the ‘walk’ from ‘crawl’ phase with 55% of net adds in ad markets coming on the ad-supported tier).”

Ehlrich thinks Netflix still hasn’t fully tapped into its markets, as millions of people still rely on traditional cable:

“Netflix estimates there are 750mn+ broadband households (ex. China/Russia) which compares to their ~300mn subscribers today. Moreover, Netflix accounts for less than 10% of viewership in each market the company operates in, which also suggests room to grow engagement in addition to new member growth.”