After posting better-than-expected subscriber growth in the fourth quarter, Netflix shares surged Thursday -- up 22%, closing at its highest point since October. Still, the $116 closing price is less than half its 52-week-high of just over $300.
Netflix announced Wednesday that it had added 220,000 subscribers to its U.S. streaming service in the October-November period, pushing the number up to 21.67 million. Barclays Capital, for one, had projected a 200,000 decline.
In a report Thursday before the trading day, Credit Suisse analyst John Blackledge raised the Netflix target price to $125 after it closed at $95 Wednesday.
In an investor letter from CEO Reed Hastings and CFO David Wells, Netflix said it expects continued challenges from Amazon and Hulu Plus, although it has advantages over both. Netflix said it expects Amazon to launch a similar service at a lesser price, but it will only have a “fraction” of the Netflix content. Hulu Plus also has lesser content and charges customers the same as Netflix, but makes them watch commercials, Netflix said.
The company said it expects broadcast and cable networks to “also become Internet networks like Netflix.” Yet Netflix should have an advantage in its on-demand opportunities and recommendation abilities.
Netflix is searching for a CMO and looks to find one at a cable network or telecom company with international experience.
Earlier in the week, a top executive, Ted Sarandos, said Netflix should have five original series by mid-2013.