Netflix stock surges 22% after strong earnings report

Investors rushed to buy Netflix Inc. stock Thursday while there was mixed reaction among media analysts about prospects for the Los Gatos, Calif., video subscription company.

One day after reporting financial results and subscriber growth during the fourth quarter that were stronger than many analysts and investors had expected, Netflix shares surged 22% on Thursday, closing at $116.01.

That’s the highest the stock has been since October, when Netflix shares plummeted after disappointing results for the third quarter, during which it lost 800,000 subscribers because of a price hike and aborted attempt to separate its DVD shipping business into a new brand called Qwikster.

The rush to buy Netflix stock came despite cautious responses from many analysts.

Arvind Bhatia of Sterne Agee said he was “incrementally bullish” but remained concerned about results in 2013 and maintained a “neutral” rating.

Janney Capital Markets analyst Tony Wible kept his “sell” rating and said “it will be difficult to scale the low-margin streaming business that is now cannibalizing the high-margin DVD business.”

John Blackledge of Credit Suisse was more bullish, calling Netflix’s results “much better than expected” and saying that although the company “remains in a transition period given a continued, albeit easing, backlash from the pricing changes and international losses, we do not believe the opportunity has changed.”

Thursday’s increase accelerated a more than 65% jump in Netflix’s share price since the beginning of the year. However, the stock is still far below its high of just under $300 in July.

[email protected]