Netflix (NFLX -2.95%) has been an amazing 5-bagger investment for those who've held for at least five years. With its market cap still in the $200-billion-plus range, it has a long way to go be allowed into the $1 trillion market cap clubhouse. On a Fool Live episode, recorded on April 14, Fool contributors Brian Stoffel and Brian Withers discuss whether this video streaming service could get there and what it would take to make it happen.
Brian Stoffel: Brian, right now Netflix is worth about $240 billion. Do you see it, and I have a follow-up question, do you see it hitting $1 trillion [market cap], and about how many subscribers do you think that might take to get there?
Brian Withers: Absolutely. We did a deep dive on Netflix yesterday, so we had a really good run at the numbers. Like you said, in order to get to a billion [oops... trillion] it has to quadruple its market cap. At least a quadruple in the number of members. But they're also going to gain pricing over time and they're also going to gain, there are some people that use their parent's or their friend's Netflix accounts. They are starting to crack down on that. I don't think that's a big growth driver, but it's something. With 200 million users that they just hit, 4x the users is about 800 million users. That's really, mostly think of it as household [subscribers] compared with YouTube, which has about 1.8 billion monthly active users and Facebook's three billion-plus or whatever. I think this is an easy, it's certainly not a lay-up as you're trying to get close to a billion users across the globe.
But I think they are well on their way. International growth is been tremendous for them and they have proven they can do it. So I look to see that this company getting to a trillion dollars [market cap] in the next 10 years.
Brian Stoffel: A quick follow-up, have you read Where the Crawdads Sing?
Brian Withers: No, my wife did, she loved it though.
Brian Stoffel: Fantastic book. I would sign up for Netflix just to see that movie.
Brian Withers: There you go.